Broadcom shares are down sharply in late trading after the chip maker posted Q3 earnings. For the quarter, the company reported revenue of $1.254 billion, up 20.6 percent from the second quarter, down 3.4 percent from a year ago, and ahead of the Street at $1.16 billion.
Shares of chip maker Broadcom fell in after-hours trading last night and are down again today despite the fact that the company yesterday exceeded Street expectations for its Q2 and forecast above estimates for the current quarter.
Charter Equity Research analyst Edward Snyder today lifted his rating on Broadcom to Buy from Market Perform. In his research note, Snyder said he expects to see an increase this fall in the company’s revenue from the wireless segment as volumes rise in shipments of EDGE system-on-a-chip components to Nokia for its low-end phones.
Qualcomm announced that it will pay Broadcom $891 million over a four-year period to settle their long-standing patent dispute. The deal settles all existing litigation between the companies. Each receives certain rights to the patent portfolios of the other company.
Broadcom this morning announced an unsolicited $9.25 a share cash offer to acquire Emulex. The deal has a total value of $764 million. The offer is 40 percent above yesterday’s closing price for ELX at $6.61.
In an interview with Tech Trader Daily, Broadcom CEO Scott McGregor said that the company has developed a chip that will allow cellphone manufacturers to put HD video cameras in their handsets. The chips will be available later this year, although McGregor said that one manufacturer was displaying a prototype privately at CES. He didn’t say which one.
There’s a dire outlook for PC chip production–most key chip companies are predicting a production drop of at least 13 percent. Taiwan Semi, the leading contract chip manufacturer, is forecasting a 29 percent drop in revenue for Q4. Accordingly, semiconductor companies are drastically reducing their output.
After falling $11 to $17.19 yesterday, shares of chipmaker Broadcom (BRCM) are staging a mild recovery this morning, up 56 cents, or 3.26 percent, at $17.75, despite a price target cut by Caris & Co.’s Betsy Van Hees. Hees cut her target to $19 from $28 (barn door, anyone?) over concerns the company will offer a disappointing outlook for its fourth quarter when it reports 3Q results on Oct. 21.
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