Semiconductor giant Broadcom (AVGO) - Get Report is close to an agreement with the European Union that would close an investigation into Broadcom contracts that make set-top box makers deploy its chips, a source told Bloomberg.
The settlement would mean no fines for Broadcom, the source said. For five years the company would offer to change contracts with customers. The EU likely will agree to Broadcom’s stance in the next few weeks, the source said.
Earlier this month, Broadcom reported non-GAAP earnings of $5.40 a share for the quarter ended Aug. 2, compared with the FactSet analyst consensus of $5.24 a share.
Revenue was $5.82 billion against the estimate of $5.76 billion.
For the fourth quarter, the company expects revenue between $6.25 billion and $6.55 billion. Analysts are forecasting revenue of $6.18 billion.
For the year-earlier period, the company posted earnings of $5.16 a share on sales of $5.5 billion. It reported net income of $693 million.
"Looking ahead, our cash-flow outlook remains robust and we plan to pay down an additional $3 billion in debt in the fourth quarter," said Chief Financial Officer Tom Krause.
"Our outlook for the fourth quarter reflects a strong anticipated ramp in wireless, as well as the continuing surge in demand for networking from cloud and telecom customers, more than offsetting expected softness in enterprise," Chief Executive Hock Tan said in a statement.
Broadcom shares recently traded at $353.42, up 0.26%, and have climbed 12% so far this year.