The 10-second takeaway
For the quarter ended March 31 (Q1), Broadcom beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share stayed the same. GAAP earnings per share grew significantly.
Margins expanded across the board.
Broadcom reported revenue of $2.01 billion. The 40 analysts polled by S&P Capital IQ hoped for a top line of $1.91 billion on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $1.78 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 40 earnings estimates compiled by S&P Capital IQ predicted $0.56 per share. Non-GAAP EPS of $0.65 were the same as the prior-year quarter. GAAP EPS of $0.33 for Q1 were 120% higher than the prior-year quarter's $0.15 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 50.7%, 120 basis points better than the prior-year quarter. Operating margin was 10.4%, 260 basis points better than the prior-year quarter. Net margin was 9.5%, 450 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.05 billion. On the bottom line, the average EPS estimate is $0.66.
Next year's average estimate for revenue is $8.43 billion. The average EPS estimate is $2.77.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 968 members out of 1,046 rating the stock outperform, and 78 members rating it underperform. Among 210 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 195 give Broadcom a green thumbs-up, and 15 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 $40.34.
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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. The Motley Fool has no position in any of the stocks mentioned. 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.