Last week, the market punished chip designer QUALCOMM
Broadcom's numbers are in, and share prices are holding up fairly well. Like Qualcomm, Broadcom edged out analyst estimates: Wall Street expected sales of $1.83 billion. The revenue target was spot on but investors were treated to $0.65 of non-GAAP diluted earnings per share.
Management doesn't do earnings guidance, but the top line should grow to roughly $1.95 billion next quarter. Excluding acquisition-related charges, gross margins should stay stable at 52%. Operating expenses should rise slower than revenues, which logically leads to higher bottom-line profits.
CEO Scott McGregor didn't try very hard to explain the puts and takes in the quarter, other than highlighting the portfolio-stretching nature of three smallish acquisitions. More detail should be forthcoming in the conference call; Look for deeper Foolish analysis of Broadcom's situation when we have that vital information in hand.
But, I think it's fair to say that Qualcomm's wafer shortage problems aren't hurting Broadcom today. This company is free to milk its tuck-in acquisitions and the exploding market for mobile communications while others worry about leading-edge manufacturing technologies. Sometimes, "good enough" really is good enough.