Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Broadcom Corporation (Nasdaq: BRCM) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 8.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- BRCM's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BRCM has a quick ratio of 2.09, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $621.00 million or 16.29% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.95%.
- The gross profit margin for BROADCOM CORP is rather high; currently it is at 54.40%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, BRCM's net profit margin of 10.33% significantly trails the industry average.
- BROADCOM CORP's earnings per share declined by 20.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BROADCOM CORP reported lower earnings of $1.64 versus $1.99 in the prior year. This year, the market expects an improvement in earnings ($2.89 versus $1.64).
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