Broadcom stock rose Friday after the chipmaker and infrastructure software provider beat Wall Street's targets for its fiscal third quarter and guided higher for the current period. AVGO stock climbed nearly 2% on the news.
The San Jose, Calif.-based company late Thursday said it earned an adjusted $9.73 a share on sales of $8.46 billion in the quarter ended July 31. Analysts polled by FactSet expected Broadcom earnings of $9.56 a share on sales of $8.41 billion. On a year-over-year basis, Broadcom earnings rose 40% while sales increased 25%.
For the current quarter ending Oct. 30, Broadcom forecast sales of $8.9 billion, up 20%. Analysts had been expecting $8.77 billion in the fiscal fourth quarter.
"Broadcom's record third-quarter results were driven by robust demand across cloud, service providers, and enterprise," Chief Executive Hock Tan said in a news release.
He added, "We expect solid demand across our end markets to continue in the fourth quarter, reflecting continued investment by our customers of next-generation technologies in data centers, broadband, and wireless."
AVGO Stock Rises After Report
On the stock market today, AVGO stock advanced 1.7% to close at 500.22. During the regular session Thursday, AVGO stock dipped 1.4% to 492.01.
Semiconductor products accounted for 78% of Broadcom's revenue in the third quarter. Meanwhile, infrastructure software contributed 22% of sales.
Chip sales rose 32% to $6.62 billion while infrastructure software sales increased 5% to $1.84 billion.
Broadcom On IBD Tech Leaders List
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. On May 26, Broadcom announced a deal to buy VMware for $61 billion in cash and stock. VMware provides cloud-computing management, infrastructure, networking, security and digital workspaces.
AVGO stock is on IBD's Tech Leaders list.
IBD Stock Checkup ranks AVGO stock as third out of 34 stocks in IBD's fabless semiconductor industry group. Further, it has an IBD Composite Rating of 79 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.
