Communications-chip maker Broadcom
What analysts say:
- Buy, sell, or waffle? Of the 26 analysts tracking Broadcom's every move, 15 of them rate the company a buy, 10 say hold, and one has stamped Broadcom with a sell rating. Broadcom also holds a three-star rating (out of five) with more than 521 opinions in the Motley Fool CAPS community.
- Revenue. On average, analysts expect revenue to inflate 10% to $1.02 billion compared with the same quarter last year.
- Earnings. The average expectation for earnings this quarter is set at $0.11 per share, 38% higher than the $0.08 per share reported last year on a GAAP basis.
What management says:
CEO Scott McGregor lauded the record revenue reported last quarter, he also noted, "In the fourth quarter and in 2008 we will continue to invest aggressively in research and development of products for the very large cellular handset market."
Displacing cellular giants like Qualcomm
What management does:
True to its word, Broadcom is spending heavily, sending margins plunging on increasing R&D costs.
6/06 |
9/06 |
12/06 |
03/07 |
06/07 |
09/07 |
|
---|---|---|---|---|---|---|
Gross |
52.4% |
51.8% |
51.3% |
51.1% |
51.1% |
51.3% |
Operating |
13.9% |
11.4% |
6.8% |
4.9% |
2.9% |
1.6% |
Net |
15.8% |
14.6% |
10.3% |
8.8% |
6.9% |
4.6% |
One Fool says:
On the cellular front, Broadcom has made progress in landing design wins with Nokia
But what will probably hit Broadcom hardest in the near term is recent comments from Motorola
Because Motorola is a significant customer for Broadcom, Broadcom is deeply affected by Motorola's poor performance, and has already been stung by Motorola once. It looks like this wound will take more time to heal. Based on Motorola's grim picture, this Fool is expecting a bleak outlook from Broadcom as well.
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