Avago's stock surged 7.5% to $82.09 on Friday on volume that was more than triple its three-month average of 1.7 million shares, hitting a 52-week intra-day high following the semiconductor supplier's fiscal third-quarter earnings report. The Singapore-based company is benefiting from its association with Apple as well as from its recent acquisition of LSI, acquired in May for $6.6 billion. Avago is also in the process of selling units deemed as outside its core business.
Late Thursday, the Singapore-based company reported adjusted net income from continuing operations of $347 million, or $1.26 a share, for the fiscal third-quarter compared to $188 million, or 74 cents a share, in the year-earlier period and earnings of $1.06 a share expected by analysts. Revenue from continuing operations doubled to $1.28 billion for the quarter. On a GAAP basis, the company reported a loss of $164 million, or 65 cents a share, from continuing operations. Avago forecasted revenue growth between 18% and 22% for its final quarter of the fiscal year.
Several equity analysts raised their price targets on Avago's stock following earnings late Thursday. Here's what analysts were saying.
John Vinh, Pacific Crest Securities (Outperform; Price Target raised to $90 from $85)
We are buyers of AVGO and are increasing our target to $90 following solid execution on the top and bottom line. Upside to revenue guidance was driven by content gains at Apple, while LSI cost synergies resulted in EPS upside.