Broadcom Beats Q2 Estimates Thanks to Leaner Business Model

Communications chip designer Broadcom shut down an unprofitable legacy division in the second quarter, helping the company beat earnings estimates.

Jul 22, 2014 at 5:50PM

A Broadcom-powered wireless charging station. Source: Broadcom.

Broadcom (NASDAQ:BRCM) shares jumped as much as 3.9% higher after Tuesday's closing bell, following the release of strong second-quarter results.

The designer of communications-focused semiconductors saw sales decline 2% year-over-year to $2.0 billion. Adjusted earnings fell 7% to $0.65 per share.

Revenue was in line with analyst estimates, but Street projections called for earnings near $0.61 per share. Broadcom beat the bottom-line consensus target.

Non-GAAP earnings chiefly excluded charges related to stock-based compensation, alongside restructuring costs as Broadcom exited the cellular baseband market.

In prepared remarks, Broadcom CEO Scott McGregor explained how a newfound focus on broadband, connectivity, and infrastructure markets will help. "We will be a stronger company, as gross margins, profitability and cash flows will noticeably improve, providing an opportunity to return more capital to our shareholders," McGregor said.

Broadcom shares have gained 31% year to date and 43% over the past 52 weeks. In after-hours action, the stock reached prices not seen since early 2011.

Leaked: Apple's next smart device (warning -- it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of these devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and to see Apple's newest smart gizmo, just click here!

Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days.

We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

Something big just happened

I don't know about you, but I always pay attention when one of the best growth investors in the world gives me a stock tip. Motley Fool co-founder David Gardner (whose growth-stock newsletter was rated #1 in the world by The Wall Street Journal)* and his brother, Motley Fool CEO Tom Gardner, just revealed two brand new stock recommendations moments ago. Together, they've tripled the stock market's return over 12+ years. And while timing isn't everything, the history of Tom and David's stock picks shows that it pays to get in early on their ideas.

Click here to be among the first people to hear about David and Tom's newest stock recommendations.

*"Look Who's on Top Now" appeared in The Wall Street Journal which references Hulbert's rankings of the best performing stock picking newsletters over a 5-year period from 2008-2013.

Compare Brokers