Broadcom Gives a Rosy Outlook, Doubles Quarterly Dividend

Broadcom Ltd. said it swung to a loss in the latest quarter, though the chip maker gave a positive outlook for the current quarter and its board doubled its dividend.

Shares, up 18% this year, rose 3.1% to $176 in recent after-hours trading.

For the current quarter, the company forecast revenue of $4.075 billion, plus or minus $75 million. Analysts polled by Thomson Reuters expected adjusted revenue of $3.96 billion.

Chip maker Avago Technologies Ltd. completed its roughly $37 billion acquisition of rival Broadcom Corp. in February, with the combined company retaining the Broadcom name and AVGO ticker symbol. The deal, one of the largest mergers in the chip sector, brought together complementary product lines, including chips that handle different tasks in smartphones from Apple Inc. and Samsung Electronics Co.

Last month, Broadcom agreed to a $5.5 billion deal for Brocade Communications Systems Inc., a planned acquisition that stands to help Broadcom further reduce its reliance on sales of wireless chips for smartphones, a market that has slowed lately.

For the period ended Oct. 30, Broadcom reported a loss of $632 million, or $1.59 a share, compared with a year-earlier profit of $429 million, or $1.49 a share. Excluding items, adjusted per-share earnings rose to $3.47 from $2.51. Analysts expected per-share profit of $3.38.

Revenue more than doubled to $4.136 billion. Net revenue including certain acquisition-related adjustments reached $4.146 billion, in line with expectations for $4.1 billion to $4.175 billion.

Gross margin fell to 52.5% from 54.2%.

After the increase, the company's quarterly dividend will stand at $1.02 a share.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

December 08, 2016 17:15 ET (22:15 GMT)

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