OK, so all that glitters may not be gold. Semiconductor designer Broadcom (NASDAQ:BRCM) just laid a heavy hand on a semiconductor industry that had been frolicking in delicious reports from the likes of Intel (NASDAQ:INTC) and Texas Instruments (NYSE:TXN) this earnings season.

Broadcom's sales total of $1.04 billion did impress me, landing 22% above the previous quarter and a scant 13% below the pre-crash 2008 quarter. But earnings took an abrupt dive to $0.03 per share. Sure, it's better than last quarter's $0.19 loss per share, but many of Broadcom's peers are keeping their GAAP noses a bit higher above water at the moment. Atheros (NASDAQ:ATHR), for example, is making a killing on next-generation wireless networking products.

So why is Broadcom lagging behind the competition right now? The company should actually be doing better than most, thanks to a sizable and sustainable new income stream from a licensing tussle with rival Qualcomm (NASDAQ:QCOM) that added a $65 million one-time settlement check this quarter along with $67 million of license payments.

Also, Broadcom counts several proven performers among its largest customers. Apple (NASDAQ:AAPL) has already shown us some muscle, and I expect more good news from Cisco (NASDAQ:CSCO) next week.

Some amount of the sluggish net income could even be attributed to creative accounting magic to keep taxable income down. I say this because Broadcom also reported $314 million in free cash flow, up from $224 million a year ago. Also, the $65 million settlement gain seems to be virtually netted out by a $50 million charitable contribution.

So Broadcom's stock is down today, but the business actually looks very healthy if you scrape a bit below the surface. I say it's a fine business available at a discount. Do you agree, or does Broadcom deserve the beating it's taking today? Let me know in the comments box below.

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Apple is a Motley Fool Stock Advisor recommendation. Intel is a Motley Fool Inside Value pick. Atheros Communications is a Motley Fool Hidden Gems recommendation. The Fool owns shares of Atheros Communications. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.