If there was a complaint to be made about Broadcom's
For much of 2009, Broadcom's Mobile & Wireless division did very well. The division boasts an emerging baseband processor business that counts Nokia
The broadband division rebounds
But going into yesterday's earnings, Broadcom's Broadband Communications division looked like it was on shakier ground. While the other divisions reported 30%+ sequential growth in a seasonally strong third quarter, Broadband Communications registered only 9% growth, with Broadcom citing competitive issues in its digital TV chip business (acquired from AMD
So it was at least a little surprising to hear Broadcom report yesterday that Broadband Communications outpaced the company's expectations by delivering 14% sequential growth in Q4, driven by cable modem and set-top box chip demand. This was just slightly below the 18% growth seen by Enterprise Networking, and well ahead of the 4% decline that Mobile & Wireless saw due to seasonal factors (manufacturers often build chip inventory in Q3 for consumer products they expect to ship in Q4).
Furthermore, along with the other divisions, Broadband Communications' sales are expected to be flat or slightly higher in a seasonally weak Q1. That's one big reason why Broadcom's implied first-quarter revenue guidance range of $1.34 to $1.41 billion blew away the $1.24 billion that Wall Street had it pegged for prior to yesterday. And with Broadcom expecting the digital TV chip business to recover and become a growth driver in 2010, there's a good chance that the division can sustain its momentum for the rest of the year.
A week of good news
Even if you ignore yesterday's earnings, this has been a pretty good news week for Broadcom. A report from Digitimes stated that the company, which already has its combo chips built into Apple's
For investors, I'd say that nothing is more important than seeing a key part of the business -- that was previously a weak link -- starting to perk up.
Eric Jhonsa has no position in any of the companies mentioned. Nokia is a Motley Fool Inside Value pick. Apple is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.