Cloudy Outlook for Broadcom

Shares fall.
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Broadcom (BRCM) blew by first-quarter targets but says it has limited visibility ahead.

The Irvine, Calif., communications chipmaker posted an adjusted profit of $175 million or 29 cents a share. Those numbers compare with profits of 31 cents in the fourth quarter and 36 cents a year ago. Analysts had anticipated a 27-cent pro forma profit, according to Reuters Research.

Sales for the quarter slipped 2% to $901.5 million from $923.5 million in the fourth quarter and were roughly flat with year-ago levels. The Street was looking for $897 million in revenue during the first quarter.

"Broadcom's first quarter results came in better than we anticipated due to slightly higher than expected revenue combined with increased operating expense efficiencies," CEO Scott McGregor said in a press release Thursday.

Looking ahead, McGregor offered no specific guidance, citing conflicting reports from gear buyers.

"Mixed outlooks from a few of our larger customers are causing a lower than normal level of visibility into our near-term results. We believe that these issues are near-term in nature and we remain optimistic regarding our prospects for the second half of the year," McGregor said.

Broadcom shares fell $1.51 to $33.35 in after-hours trading Thursday.