The 10-second takeaway
For the quarter ended March 31 (Q1), Broadcom beat expectations on both revenue and earnings per share.
Compared to the prior-year quarter, revenue improved slightly, while GAAP earnings per share shrank significantly.
Gross margin grew, operating margin shrank, and net margin dropped.
Broadcom booked revenue of $1.83 billion. The 36 analysts polled by S&P Capital IQ anticipated sales of $1.78 billion on the same basis. GAAP-reported sales were 3.6% higher than the prior-year quarter's $1.76 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.65. The 31 earnings estimates compiled by S&P Capital IQ anticipated $0.55 per share. GAAP EPS of $0.15 for Q1 were 65% lower than the prior-year quarter's $0.43 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 49.8%, 30 basis points better than the prior-year quarter. Operating margin was 9.1%, 170 basis points worse than the prior-year quarter. Net margin was 4.8%, 810 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.92 billion. On the bottom line, the average EPS estimate is $0.65.
Next year's average estimate for revenue is $7.97 billion. The average EPS estimate is $2.84.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 917 members rating the stock outperform and 76 members rating it underperform. Among 235 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 218 give Broadcom a green thumbs-up, and 17 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Broadcom is outperform, with an average price target of $42.28.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.