SAN JOSE, Calif. – Broadcom Ltd. will get a bigger bite of the Apple iPhone 7 and can’t get enough chips to handle the demand for 4K set-top boxes or data center switches. That said, the company’s chief executive, Hock Tan, sees the overall semiconductor industry as stable, not booming.
The outlook came as Broadcom reported revenue of $3.792 billion, up 7% from the prior quarter and a net loss of $315 million, according to generally accepted accounting procedures. In non-GAAP terms that exclude costs related to acquisitions, Broadcom reported quarterly profit of $1.293 billion and earnings per share (EPS) of $2.89, slightly ahead of Wall Street’s expectations.
Tan took over as chief executive after a landmark $37 billion bid last year to buy Broadcom, a deal that closed in February. The merged company, which sold off some of its wireless business to Cypress earlier this year, won’t fully realize its cost savings until sometime next year.
“We’ve made rapid progress driving toward our target business model, but we are not yet done with the full realization of expected cost synergies,” he said in a call with financial analysts.
Tan forecast 8% revenue growth and a 16% rise in EPS in the current quarter, largely driven by the company’s increasing content in the iPhone which Apple is expected to launch September 7. Broadcom’s wireless business surged 27% in the last quarter, largely due to orders related to the iPhone7.
The wireless group should see sales grow another 30% in the current quarter as the iPhone7 ramps, despite an expected seasonal downturn in business in Samsung’s high-end Galaxy phones.
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