Chipmaker and infrastructure software provider Broadcom (AVGO) late Thursday beat Wall Street’s targets for its fiscal third quarter but offered an outlook that was only in line with analyst estimates for the current period. AVGO stock slid in extended trading.
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The San Jose, Calif.-based company earned an adjusted $10.54 a share on sales of $8.88 billion for the quarter ended July 30. Analysts polled by FactSet called for Broadcom earnings of $10.43 a share on sales of $8.85 billion. On a year-over-year basis, Broadcom earnings rose 8% while sales increased 5%.
For the current quarter, Broadcom forecast revenue of $9.27 billion, matching views.
“Broadcom’s third-quarter results were driven by demand for next-generation networking technologies as hyperscale customers scale out and network their AI clusters within data centers,” Chief Executive Hock Tan said in a news release.
He added, “Our fourth-quarter outlook projects year-over-year growth, reflecting continued leadership in networking for generative AI.”
AVGO Stock Sinks After Report
In after-hours trading on the stock market today, AVGO stock fell 3.1% to 894.11. During the regular session Thursday, AVGO stock rose 3.4% to close at 922.89.
Semiconductor products accounted for 78% of Broadcom’s revenue in the third quarter. Meanwhile, infrastructure software contributed 22% of sales. Chip sales rose 5% to $6.94 billion while infrastructure software sales increased 5% to $1.94 billion.
Meanwhile, Broadcom expects its acquisition of VMware (VMW) to close on Oct. 30. The companies announced the cash-and-stock deal in May 2022.
AVGO stock and VMW stock are on the IBD Tech Leaders list.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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