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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