Shares of Broadcom (NASDAQ:AVGO) have gained today, up by 3% as of 12:40 p.m. EDT, after the company reported fiscal third-quarter earnings. The results topped expectations and Broadcom issued an optimistic outlook.
Revenue in the fiscal third quarter was $5.82 billion, ahead of the $5.76 billion in sales that Wall Street was looking for. That translated into adjusted earnings per share of $5.40, beating the consensus estimate of $5.24 per share in adjusted profits. Adjusted EBITDA was $3.3 billion and free cash flow was $3.1 billion.
"We delivered third quarter revenue results in-line with our expectations, driven by healthy demand from cloud and telecom customers, which more than offset the expected reset in wireless," CEO Hock Tan said in a statement. "Our outlook for the fourth quarter reflects a strong anticipated ramp in wireless, as well as the continuing surge in demand for networking from cloud and telecom customers, more than offsetting expected softness in enterprise."
Broadcom had previously told investors that the production ramp at its "large North American mobile phone customer," referring to Apple, would be slightly later this year. The revenue associated with annual iPhone launches would start to tick higher in the fiscal fourth quarter instead of the fiscal third quarter. The COVID-19 pandemic has created delays throughout consumer electronics supply chains this year, and Apple is expected to release the iPhone 12 later than usual.
"And given the continuing surge of demand in networking and the expected 5G phone ramp in wireless, we expect a mid-teens percentage sequential increase in our fourth fiscal quarter," Tan said on the conference call with analysts.
Guidance for the fiscal fourth quarter calls for revenue of $6.25 billion to $6.55 billion, with adjusted EBIDA of approximately $3.7 billion. Analysts are looking for $6.2 billion in sales.