As the guy on the message board put it, "They should warn more often!"
That's the sentiment of many Broadcom
I'm not a big believer in the kind of breezy generalizations that pass for analysis of an entire industry, but the succession of major chip firms having stumbles over the past few weeks has been enough to make anyone believe that the semiconductor industry is run by starry-eyed optimists.
Broadcom lowered its third-quarter revenue target by 5% from its previous guidance to $641 million. That would represent 5% growth over the second quarter, but 50% over the prior-year period. Management claims the "industry-wide" inventory glut that's crimping everyone else's style should be short-lived, and, in its case, remains limited to weaknesses in the market for products designed for mobile handsets and set-top boxes.
A Fool would do well to ponder that statement; especially since the handset market has been red-hot, with last quarter's shipments up 35%, even better than industry watchers predicted. How do you know that the firm's crystal ball is focused now?
No, it can't be easy trying to predict demand when your products have become a commodity. And that's just the problem. There's competition everywhere, and fickle consumers can render the best forecasts meaningless as quickly as you can zip a purse shut.
That's why this sector, including peers like Agere Systems
Broadcom may be a marquee name, or the darling of the moment, but, cheap as it may look in light of the -- wildly variable -- analysts' earnings estimates, it can't escape the reality of its brutal sector. If you must have your tech, there are plenty of other companies out there with great growth and better locks on their respective markets.
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