What happened
Shares of Broadcom (AVGO +4.89%) climbed as much as 11.7% early Friday, then settled to trade up 8.3% as of 3:00 p.m. EDT after the semiconductor and infrastructure-software leader announced strong fiscal first-quarter 2019 results and reiterated its full-year outlook.
Regarding the former, Broadcom's revenue climbed 9% year over year, to $5.79 billion, translating to adjusted (non-GAAP) net income of $2.446 billion, or $5.55 per share (up from $5.12 per share a year earlier). By comparison -- and though we don't usually pay close attention to Wall Street's demands -- most analysts were expecting significantly lower earnings of $5.23 per share on slightly higher revenue of $5.82 billion.
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So what
"Strong results in our networking business supported our semiconductor solutions segment, despite the anticipated sharp decline in wireless," added Broadcom CEO Hock Tan. "Additionally, our infrastucture software segment performed extremely well as we made good progress with the CA business integration into Broadcom."
More specifically, Broadcom's semiconductor solutions segment saw sales decline 12% year over year, to $4.37 billion, while infrastructure software sales more than quadrupled, to $1.4 billion, thanks largely to its mammoth $18.9 billion acquisition of CA Technologies last year.
Check out the latest earnings call transcript for Broadcom.
Now what
"Similar to our peers, we see a slowdown in China impacting demand," Tan elaborated. "However, much of this was factored into our original guidance and we are maintaining our full year fiscal 2019 business outlook."
Sure enough, Broadcom reaffirmed its previous full-year guidance for revenue of roughly $24.5 billion -- a view that undoubtedly helps alleviate any concerns over its seemingly light top-line result in the first quarter. After coupling that outlook with Broadcom's strong earnings to start the year, it's no surprise to see shares climbing today.
