Skip to main content

NEW YORK (TheStreet) -- Shares of Avago Technologies (AVGO) - Get Broadcom Inc. Report are up by 4.25% to $113.12 in mid-morning trading on Wednesday, ahead of the release of the company's 2015 third quarter earnings results, due out after the market close today.

Analysts are expecting that the company will post a year over year rise in earnings and revenue for the most recent quarter.

Avago Technologies has been forecast by analysts surveyed by Thomson Reuters to report earnings of $2.14 per share on revenue of $1.74 billion.

Last year, the company reported earnings of $1.26 per diluted share on revenue of $1.29 billion for the 2014 third quarter. 

TheStreet Recommends

Avago Technologies, based in Singapore, is a designer, developer and global supplier of a range of analog semiconductor devices.

Separately, TheStreet Ratings team rates AVAGO TECHNOLOGIES LTD as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate AVAGO TECHNOLOGIES LTD (AVGO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • AVGO's very impressive revenue growth greatly exceeded the industry average of 10.5%. Since the same quarter one year prior, revenues leaped by 134.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 117.7% when compared to the same quarter one year prior, rising from $158.00 million to $344.00 million.
  • Net operating cash flow has significantly increased by 164.14% to $663.00 million when compared to the same quarter last year. In addition, AVAGO TECHNOLOGIES LTD has also vastly surpassed the industry average cash flow growth rate of -42.41%.
  • The gross profit margin for AVAGO TECHNOLOGIES LTD is rather high; currently it is at 63.83%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 20.91% trails the industry average.
  • Powered by its strong earnings growth of 95.08% and other important driving factors, this stock has surged by 50.60% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: AVGO Ratings Report