Broadcom shares rose Friday after the chipmaker surpassed Wall Street's targets for its fiscal first quarter and predicted accelerating sales growth in the current quarter. AVGO stock climbed 3% on the news.
The San Jose, Calif.-based company late Thursday said it earned an adjusted $8.39 a share on sales of $7.71 billion in the quarter ended Jan. 30. Analysts had expected Broadcom earnings of $8.13 a share on sales of $7.61 billion, according to FactSet. On a year-over-year basis, Broadcom earnings increased 27% while sales rose 16%.
For its fiscal second quarter ending May 1, Broadcom forecast sales of $7.9 billion, up 20% year over year. Analysts had predicted $7.43 billion in sales.
"Broadcom's record first-quarter results were driven by strong enterprise demand, and continued investments in next-generation technology by hyperscale and service providers," Chief Executive Hock Tan said in a news release. "Our second-quarter outlook projects year-over-year growth to accelerate."
AVGO Stock Rises On Earnings Report
On the stock market today, AVGO stock popped 3% higher to close at 595.99. During the regular session Thursday, AVGO stock slid 1.2% to 578.60.
At least seven Wall Street analysts raised their price targets on AVGO stock after Broadcom's earnings report.
Broadcom makes wireless chips for smartphones, such as Apple iPhones. It also makes semiconductors for broadband communications, networking, storage and industrial applications. Plus, Broadcom has a growing business in infrastructure software for mainframes, data centers and cybersecurity.
Semiconductor products accounted for 76% of Broadcom's revenue in the first quarter. Infrastructure software contributed 24% of sales.
AVGO stock has been consolidating for the past nine weeks with a buy point of 677.86, according to IBD MarketSmith charts. The buy point is 10 cents above the stock's all-time high of 677.76. AVGO stock reached that high-water mark on Dec. 28, three weeks after the company delivered better-than-expected results for its fiscal fourth quarter.
AVGO stock ranks ninth out of 30 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 91 out of 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
