Broadcom will again distribute a dividend of USD 1.75 per share, which last quarter was upped by over 70 percent. The move comes after a solid fiscal first quarter, with revenues well within guidance, advancing almost 30 percent from the year before to USD 4.139 billion. Growth was helped by the fact that the fiscal quarter has one extra week compared to the year earlier and by contributions from earlier acquired Brocade Communications Systems.
The gross margin went higher than expected to 49.3 percent, from 48.3 percent. Operating expenses came in a bit under guidance at USD 1.685 billion, higher than last year’s 1.495 billion. The operating profit went up to USD 943 million or 17.7 percent of revenue, from 506 million or 12.2 percent. The net profit meanwhile soared to USD 6.230 billion from USD 239 million, with earnings per share going to USD 14.62 from 0.57. The figure was helped by a significant gain from the new US tax rules. Cash and cash equivalents slid to USD 7.076 billion from 11.204 billion in the fourth quarter.
CEO Hock Tan said that looking forward, the company expects to sustain topline momentum with strong data centre demand for networking and enterprise storage products, and a seasonal recovery in broadband access. This will offset a sharp seasonal decline in wireless. Tan said the company also expects the gross margin to expand and drive free cash flow above its long-term target of 40 percent of revenue. No mention was made about the company's failed takeover bid for Qualcomm.
For the second quarter to 6 May, Broadcom is guiding for revenues at USD 4.997 billion, give or take USD 75 million, a gross margin of 50 percent, give or take 1 percent, and operating expenses at USD 1.375 billion.
