In wake of Qualcomm drama, Broadcom posts solid Q1 2018 results
Broadcom on Thursday published its first quarter 2018 financials, delivering solid results and promising topline momentum for the current quarter in spite of the drama surrounding its failed Qualcomm takeover bid.
The semiconductor device supplier posted non-GAAP earnings of $5.12 on revenue of $5.33 billion.
Wall Street was looking for non-GAAP earnings of $5.04 on revenue of $5.32 billion.
The majority of Broadcom's Q1 revenue came from its wireless communications segment, which brought in $2.21 billion, up 88 percent year-over-year. Wireless infrastructure accounted for $1.879 billion, down 10 percent year-over-year. Enterprise storage, bringing in $991 million, was up 40 percent year-over-year, while the "industrial and other" segment was up 39 percent year-over-year at $251 million.
The results come just a day after the company finally gave up its bid for Qualcomm, capping off months-long showdown with Qualcomm and the US government. The bid faced resistance from Qualcomm, and it also drew the attention of the US Committee on Foreign Investment in the US (CFIUS). President Trump then blocked the deal, citing "credible evidence" from CFIUS that a merger could pose a national security threat to the US.
Still, the company has a healthy outlook for Q2.
"In the second quarter, we expect to sustain topline momentum with strong data center demand for our networking and enterprise storage products, and a seasonal recovery in broadband access, to offset a sharp seasonal decline in wireless," CEO Hock Tan said in a statement. "Importantly, we expect gross margin to expand and drive free cash flow above our long term target of 40 percent of revenue."
For the second quarter, Broadcom expects revenue of $4.997 billion, plus or minus $75 million, which puts it in line with analyst expectations.