Broadcom’s (AVGO) - Get Report better-than-expected fourth-quarter earnings received a collective thumbs up from Wall Street analysts on Friday, even as the chipmaker and software infrastructure provider warned that weak spending among its networking and broadband customers will likely ding its 2021 numbers.
Broadcom on Thursday posted fiscal fourth-quarter net income of $1.32 billion, or $2.93 a share, up from $847 million, or $1.97 a share, a year ago. On an adjusted basis, Broadcom earned $6.35 a share, above the $6.25 a share expected by analysts polled by FactSet. Sales rose to $6.47 billion from $5.78 billion a year ago.
Analysts were broadly positive on the numbers, despite Broadcom’s warning that weak spending by companies could impact its 2021 results.
In addition to analysts at Jefferies, Susquehanna and RBC Capital Markets all either reiterating or raising their ratings and price targets, TheStreet's Action Alerts PLUS team also gave Broadcom a post-earnings passing grade.
Specifically, the team noted Broadcom had an overall "solid" quarter driven by growing revenue from its software segment, which in turn should help expand margins and provide for a recurring revenue stream - "two factors that members familiar with our Apple investment thesis know can lead to multiple expansion over time."