This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Broadcom's Turnaround Story Continues

NEW YORK ( TheStreet) -- It seems with each passing quarter, semiconductor giant Broadcom (BRCM - Get Report) finds a way to narrow the gap that exists between it and market leaders Qualcomm (QCOM - Get Report) and Texas Instruments (TXN - Get Report).

The company's performance is even more notable when one considers how unimpressive recent earnings results have been from not only Intel (INTC - Get Report), but from the entire sector. While Broadcom stock is far from cheap at current levels, investors were looking to the company's Q3 results for further confirmation that they had placed the right bet buying the stock several quarters ago. Broadcom delivered.

The Quarter That Was

Broadcom reported third-quarter non-GAAP net income of 79 cents per share compared with analysts expectations of 76 cents. Impressively, for the first time in the company's history, Broadcom was able deliver $2 billion in revenue in one quarter -- reaching $2.13 billion, up 9% year over year and beating analysts' estimates of $2.09 billion. This marks the third consecutive quarter revenue has grown on an annual basis.

The performance was good, but it generated some mixed views from investors who were quick to point out the company actually missed its EPS estimates on a GAAP basis with net income falling to $220 million and down 18.5% year over year. It also didn't help generate much excitement that Broadcom offered weaker guidance than expected.

Broadcom expects fourth-quarter revenue of $1.95 billion to $2.10 billion -- slightly weaker than consensus estimates of $2.12 billion. Likewise, analysts lowered 4Q estimates one penny to 54 cents per share. While that might be indeed legitimate cause for concern, that the company is growing revenue in the face of stiff competition and a tough macro environment suggests that its investments in sales and marketing are doing just fine.

What's more, Broadcom's performance during the quarter as well as its guidance stacks up very well compared with Texas Instruments and Intel. But it seems it continues to trail the performance of Nvidia (NVDA), which not only beat on both on its top and bottom lines but also raised guidance for its third quarter.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AMZN $372.37 1.40%
BRCM $42.17 0.06%
INTC $29.98 -0.33%
QCOM $66.91 -0.36%
TXN $55.98 0.32%

Markets

DOW 17,700.72 +22.49 0.13%
S&P 500 2,058.47 +2.32 0.11%
NASDAQ 4,880.7540 +17.3920 0.36%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs