Broadcom Inc. (AVGO) posted stronger than expected first quarter earnings after the close of trading Thursday and said it would return around $12 billion to stockholders this year through dividends and stock buy backs.
Broadcom said earnings for the three months ending on February 3, the company's fiscal first quarter, came in at $5.55 per share, up 8.4% from the same period last year and well ahead of the Street forecast of $5.22 per share. Group net revenues, Broadcom said, were pegged at $5.789 billion, up 8.7% from the previous year period but just shy of the consensus forecast of $5.82 billion.
Free cash flow grew 39% from last year to more than $2 billion, Broadcom said, and it sees "returning approximately $12 billion to stockholders in fiscal 2019 via a combination of cash dividends and stock buy backs and eliminations, while maintaining our investment grade credit rating."
"We had a good start to 2019 as we continued to execute on our proven business model. Strong results in our networking business supported our semiconductor solutions segment, despite the anticipated sharp decline in wireless," said CEO Hock Tan. "Additionally, our infrastructure software segment performed extremely well as we made good progress with the CA business integration into Broadcom."
"Similar to our peers, we see a slowdown in China impacting demand," Tan added. "However, much of this was factored into our original guidance and we are maintaining our full year fiscal 2019 business outlook."
Broadcom shares were marked 5.15% higher in after-hours trading following the earnings release, indicating a Friday opening bell price of $282.00 each, a move that would extend the stock's year-to-date advance past 11.6%.
Broadcom also said gross margins improved by 150 basis points from last quarter to 55.4% of net revenue, and was up more than 6.1% from the same period last year. Operating expenses, however, surged 57% to $2.653 billion.