NEW YORK ( TheStreet) -- Sometimes, whether it is by accident or by proxy, finding good values on Wall Street today is something that should not be taken for granted, particularly considering how broadly expensive some equities have gotten.
Very few sectors have demonstrated such valuation irrationality as the chip stocks, where names including
continue to enjoy P/E ratios suggesting the sky's the limit while little is expected from traditional powers
However, in the constant battle for chip supremacy one name that rarely ever gets mentioned is
(BRCM - Get Report)
. But I suspect that is all about to change after its strong second quarter.
In a climate that has been rattled by some recent disappointments from two of Wall Street's darlings --
-- Broadcom, as it did in its first quarter, once again rose to the occasion by not only reporting exceptional numbers, but offering guidance that made me wonder if our macro concerns were not merely exaggerated and overblown.
Leading into last month's conference call, I wasn't exactly sure of what to expect in light of
Apple's weakened iPhone sales
. This is important to consider because in addition to
, Apple represents over 10% of Broadcom's revenue.
However, in its most recent earnings report, Broadcom announced net income of $160 million, or 28 cents per share, on revenue of $1.97 billion.
The company's sales total for the quarter represents a sequential increase of almost 8% and an annual increase of almost 10%. While some may argue it was a small beat, in this environment anyone will take it -- even Apple.
What also stood out was Broadcom's operating income, which declined slightly from the previous year but on a sequential basis it showed a considerable improvement from its first quarter.
Its better-than-expected numbers were attributable to increased demand for its set-top box chips, which the company said continues to grow as more consumers outside of the U.S. and Europe subscribe to digital television services. For that matter, this is one of the key differentiators of the company from others within the sector -- it has a highly well-diversified product/service portfolio.