Broadcom Q3 Earnings Beat Estimates, Shares Fall on Weak Q4 Guidance

Zacks09-06

Broadcom AVGO reported third-quarter fiscal 2024 non-GAAP earnings of $1.24 per share, beating the Zacks Consensus Estimate by 3.33% and increasing 18.1% year over year.Net revenues surged 47.3% year ...

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The top-line growth was driven by strong demand for AI semiconductor solutions and VMware.However, AVGO shares were down more than 7% in pre-market trading following a disappointing fourth-quarter fiscal 2024 guidance. The stock has gained 37.9% compared with the Zacks Computer & Technology sector’s appreciation of 16% year to date.AVGO’s Top-Line Growth Rides on Strong AI & VMware. As of Aug. 4, 2024, cash and cash equivalents were $9.95 billion compared with $9.8 billion reported as of May 5, 2024.Total debt  was $70 billion as of Aug. 4, 2024, compared with $74 billion as of May 5, 2024.Broadcom generated $4.96 billion cash flow from operations compared with $4.72 billion in the previous quart","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"AVGO":"博通","AVGOP":"BROADCOM INC PFD SER A 22","PYPL":"PayPal"},"translate_title":"博通第三季度盈利超出预期，股价因第四季度指引疲弱而下跌","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AVGO":1,"AVGOP":1,"PYPL":0.6},"content_text":"Broadcom AVGO reported third-quarter fiscal 2024 non-GAAP earnings of $1.24 per share, beating the Zacks Consensus Estimate by 3.33% and increasing 18.1% year over year.Net revenues surged 47.3% year over year to $13.07 billion, surpassing the Zacks Consensus Estimate by 1.31%. The top-line growth was driven by strong demand for AI semiconductor solutions and VMware.However, AVGO shares were down more than 7% in pre-market trading following a disappointing fourth-quarter fiscal 2024 guidance. The stock has gained 37.9% compared with the Zacks Computer & Technology sector’s appreciation of 16% year to date.\nAVGO’s Top-Line Growth Rides on Strong AI & VMware\nSemiconductor solutions revenues (55.6% of net revenues) totaled $7.27 billion, up 5% year over year. The uptick was driven by the strong adoption of hyperscaler.Networking revenues of $4 billion soared 43% year over year and contributed 55% to Broadcom’s semiconductor revenues. The company witnessed strong demand for its custom AI accelerators, AI networking solutions, Ethernet switching, optical lasers, thin dies, PCI Express switches and Network Interface Cards from hyperscale customers. \n\nBroadcom Inc. Price, Consensus and EPS Surprise\n\nBroadcom Inc. price-consensus-eps-surprise-chart | Broadcom Inc. Quote\n\nNon-AI networking revenues improved 17% sequentially although it was down 41% year over year. Storage connectivity revenues of $861 million. It plunged 25% year over year but improved 5% sequentially.Broadband revenues declined 49% year over year to $557 million and contributed 8% to semiconductor revenues. Wireless revenues of $1.7 billion contributed 23% to semiconductor revenues and were up 1% year over year.Industrial resale revenues of $164 million declined 31% year over year.Infrastructure software revenues (44.4% of net revenues) soared 200% year over year to $5.8 billion, including a $3.8 billion contribution from VMware.Annualized booking value for VMware solutions jumped 32% year over year to $2.5 billion. VMware Cloud Foundation accounted for 80% of total VMware products booked in the reported quarter.\nAVGO’s Operating Details\nThe non-GAAP gross margin was 77% compared with 107% in the year-ago quarter.Research and development, as a percentage of net revenues, decreased 600 bps year over year to 11.3%. SG&A expenses decreased 420 bps to 5.3%.Adjusted EBITDA increased 11% year over year to $8.22 billion. The adjusted EBITDA margin was 62.9% compared with 83.7% reported in the year-ago quarter.The non-GAAP operating margin was 60.8% compared with 80.5% reported in the year-ago quarter.\nAVGO’s Balance Sheet & Cash Flow\nAs of Aug. 4, 2024, cash and cash equivalents were $9.95 billion compared with $9.8 billion reported as of May 5, 2024.Total debt (including the current portion of $3.16 billion) was $70 billion as of Aug. 4, 2024, compared with $74 billion as of May 5, 2024.Broadcom generated $4.96 billion cash flow from operations compared with $4.72 billion in the previous quarter. The free cash flow was $4.79 billion compared with $4.44 billion in the prior quarter.In the reported quarter AVGO paid $2.5 billion (52.5 cents per share) in cash dividends. For fourth-quarter fiscal 2024, it expects to pay a dividend of 53 cents per share.\nAVGO Offers Q4 Guidance\nFor fourth-quarter fiscal 2024, Broadcom expects revenue of approximately $14 billion. Adjusted EBITDA margin is expected to be 64%. Gross margin is expected to decline 100 bps on a sequential basis.Considering fiscal fourth-quarter guidance for revenues, fiscal 2024 revenues are now implied at $51.5 billion, including a contribution from VMware, suggesting an increase of 42% from the prior-year levels. Adjusted EBITDA margin is now expected to be 61.5%.AI revenues are expected to increase by more than $12 billion.\nZacks Rank & Stocks to Consider\nCurrently, AVGO has a Zacks Rank #3 (Hold).Some better-ranked stocks in the broader technology sector are AudioEye AEYE, Aspen Technology AZPN and Paypal PYPL, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. \nAudioEye’s shares have gained 285.6% in the year-to-date period. The long-term earnings growth rate for AEYE is pegged at 25%. \nAspen Technology’s shares have climbed 3.8% in the year-to-date period. The long-term earnings growth rate for AZPN is currently projected at 13.12%. \nShares of PayPal have increased 17.3% in the year-to-date period. The long-term earnings growth rate for PYPL is pegged at 15.9%\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nBroadcom Inc. (AVGO) : Free Stock Analysis Report\nAspen Technology, Inc. (AZPN) : Free Stock Analysis Report\nPayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report\nAudioeye, Inc. (AEYE) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.26.4","shortVersion":"4.26.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2465610280"}