Broadcom (BRCM) shares are down sharply in late trading after the chip maker posted Q3 earnings.

Note: Broadcom has the confusing habit of reporting only GAAP profits, while the Street tracks non-GAAP results. This made it look like the company suffered a huge earnings miss in the quarter, although this turns out not to be the case. Read on.

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.

GAAP EPS was 16 cents a share, which a Broadcom spokesman notes is above the Street at 11 cents. On a non-GAAP basis–a number not in the release–the company earned 40 cents, beating the Street consensus at 33 cents.

Read the rest of this post on the original site

Shares of chip maker Broadcom (BRCM) 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.

A note from JMP Research’s Alax Gauna sums up the bear case for the stock. Gauna writes today that Broadcom’s beat was aided by a $65.3 million payment from Qualcomm (QCOM) as a result of a settlement reached between the two back in April.

Read the rest of this post on the original site

Charter Equity Research analyst Edward Snyder today lifted his rating on Broadcom (BRCM) 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 (NOK) for its low-end phones.

Snyder says the part had been delayed by a “noise issue” that now appears to be corrected. Snyder says the total EDGE market could be in the $200 million to $250 million range; he says the low-cost portion targeted by Broadcom will be just a small fraction of the market, but that successful deployment of the EDGE SOC “would ensure Broadcom’s position in the top echelon of baseband providers.”

Read the rest of this post on the original site

Qualcomm (QCOM) announced that it will pay Broadcom (BRCM) $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. Terms of the licensing revenue model for Qualcomm’s 3G and 4G patents are unchanged.

The two companies agreed not to assert patents against each other; Broadcom also agreed not to sue Qualcomm’s customers over products that include Qualcomm chips in cellular prodocuts.

Read the rest of this post on the original site

Broadcom (BRCM) this morning announced an unsolicited $9.25 a share cash offer to acquire Emulex (ELX). The deal has a total value of $764 million. The offer is 40 percent above yesterday’s closing price for ELX at $6.61.

Broadcom says that it believes “its leadership in Ethernet networking, together with Emulex’s deeper expertise in Fibre Channel storage networking, will enable the combined company to accelerate the development of converged solutions for enterprise networks.”

Broadcom says it believes the deal would be accretive in 2010. The deal would be funded by cash and securities on hand.

Read the rest of this post on Barron’s

Broadcom (BRCM) has developed a new chip that will allow cellphone manufacturers to offer HD video cameras in their handsets. In an interview Friday with Tech Trader Daily, Broadcom CEO Scott McGregor said the chip will be available later this year, with large volumes shipping in 2010. McGregor said one handset maker was displaying a prototype phone using the chip privately at the show, but he declined to identify the manufacturer. McGregor said the first version of the chip will produce video at 720p resolution–full HD at 1080p or 1080i will be in the next-generation chip, which he says is “not that far away.” McGregor says the chip will be able to shoot six hours of video on an average cellphone battery.

Broadcom, like many chip companies at the show, was displaying its wares in a private display area. But on Friday afternoon the spacious booth was bustling with visitors. Broadcom had some interesting technologies on display:

Read the rest of this post

Semiconductor companies are planning sharp production cuts for both Q4 2008 and Q1 2009, according to a report today by Craig Berger, chip analyst at Friedman Billings Ramsey. He says that PC chip firms are seeing “significant production weakness,” as are communications IC producers–and that semiconductor companies are adjusting their own output accordingly.

Here’s a rundown on Berger’s outlook for production in the next few quarters from key chip companies; what he’s measuring here are wafer starts, or a little more roughly, units:

• Broadcom (BRCM): He sees production down 13 percent in Q4 from Q3, worse than his previous estimate of down eight percent; for Q1 he sees a further 17 percent cut.
• Marvell (MRVL): For Q4, down 18 percent, versus previous estimate of down 13 percent. For Q1, down another 10 percent.
• Texas Instruments (TXN): For Q4, production down 18 percent, no change; with Q1 down another 20 percent.

Read the rest of this post

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. Van Hees says pressure upon average selling prices of chips is increasing across the industry because “order rates for Q4 are below typical seasonal patterns largely due to weakening end market demand.”

Read the rest of this post