Broadcom Tanks Despite Posting Record Revenue

IRVINE, Calif. ( TheStreet) -- Broadcom ( BRCM) beat Wall Street's revenue and earnings forecast with record fourth-quarter results Tuesday, but shares fell in extended trading.

The chip maker brought in record quarterly revenue of $1.95 billion, up from $1.34 billion in the same period last year and above Wall Street's estimate of $1.9 billion. Excluding items, Broadcom earned 75 cents a share, compared to 59 cents a share in the prior year's quarter, and just above analysts' forecast of 74 cents a share.
Broadcom reported its fourth-quarter results after market close on Tuesday.

Investors responded negatively to the results, pushing Broadcom shares down $2.42, or 5.22%, to $43.97 in extended trading.

In a separate announcement, Broadcom said it is increasing its quarterly dividend by 12.5%, to 9 cents a share. The company also announced a $300 million share repurchase plan.

"Our record results, powerful balance sheet and strong operating cash flow enable us to increase our dividend by 12.5% and accelerate share repurchases," said Scott McGregor, the Broadcom CEO, in a statement.

For the first quarter, Broadcom expects revenue between $1.75 billion and $1.85 billion. Analysts surveyed by Thomson Reuters had forecast sales of $1.8 billion.

Broadcom's results came hot on the heels of strong results from rival Qualcomm ( QCOM), which has been reaping the benefits of strong smartphone sales. Both chip makers provide yet more evidence of a robust IT spending environment.

--Written by James Rogers in New York.

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