Broadcom ( BRCM), a maker of communications chips, said it met Wall Street's lowered earnings estimates for the latest first quarter.
The company said on Wednesday that it earned $24.2 million, or 9 cents a share, in the quarter, matching the consensus forecast of analysts polled by Thomson Financial/First Call. The company earned 18 cents a share a year ago and 32 cents a share in the latest fourth quarter. Broadcom warned on March 6 that it expected earnings of 8 cents to 9 cents a share and revenue of $315 million to $325 million, a shortfall the company attributed to order cancellations. The company checked in with gross revenue of $318.1 million, up from $191.6 million in the year-ago period. Wall Street was expecting revenue to come in at $338.7 million. Shares of Broadcom, which is based in Irvine, Calif., jumped $4.61, or 15.7%, to $34.01 in regular-session Nasdaq trading, and gained 3.5% to $35.19 in after-hours Instinet activity. Broadcom is struggling with the same problems affecting many other companies in the communication chip sector. A slowdown in telecom spending and inventory pile-ups at Broadcom's customers have meant less demand for its chips. Cisco ( CSCO), one of Broadcom's customers, on Monday said it would write down about $2.5 billion worth of inventory that it hasn't used. "Looking ahead, as a result of the continued weakness in the communications sector, we have not yet seen improvement in order visibility from customers,'' the company said in a statement. "Despite the current weakness that exists in the business, we continue to be confident that our product roadmaps in both the core and emerging markets will position us well as the economy recovers." On a conference call after the earnings announcement, the company said it expects gross revenue to drop 20% to 22% sequentially in the second quarter. Broadcom is also expecting to lose, before charges, 7 cents to 9 cents a share. Analysts are looking for earnings of 6 cents a share and revenue of $368.8 million.