The 10-second takeaway
For the quarter ended June 30 (Q2), Broadcom met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share contracted.
Margins dropped across the board.
Broadcom chalked up revenue of $1.97 billion. The 36 analysts polled by S&P Capital IQ expected a top line of $1.95 billion on the same basis. GAAP reported sales were 10% higher than the prior-year quarter's $1.74 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 $0.72. The 34 earnings estimates compiled by S&P Capital IQ anticipated $0.67 per share. GAAP EPS of $0.28 for Q2 were 9.7% lower than the prior-year quarter's $0.31 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 49.1%, 80 basis points worse than the prior-year quarter. Operating margin was 8.3%, 180 basis points worse than the prior-year quarter. Net margin was 8.3%, 170 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.09 billion. On the bottom line, the average EPS estimate is $0.77.
Next year's average estimate for revenue is $8.03 billion. The average EPS estimate is $2.93.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 937 members rating the stock outperform, and 77 members rating it underperform. Among 219 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 202 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 $42.29.
Is Broadcom the best semiconductor stock for you? You may be missing something obvious. Check out the semiconductor company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Broadcom to My Watchlist.
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.