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Broadcom Reports Q1 In Line With Guidance

Broadcom said results for its fiscal first quarter to 2 February were in line with expectations, with steady growth from its networking storage and broadband businesses, CEO Hock Tan said. Nevertheless, even though the semiconductor market is doing better and that the covid-19 outbreak did not have a material impact on the company’s figures in Q1, visibility is still lacking looking forward, with demand uncertainty getting more intense. As a result, Tan said the company is withdrawing its previous forecast for the year, and that it will not present any annual guidance until visibility returns to pre covid-19 levels.

CFO Tom Krauses noted Broadcom was well positioned to continue supporting dividends to shareholders despite the challenging market backdrop, with free cash flow up 9 percent, a cash position of USD 6.4 billion and a healthy outlook for cash flow looking ahead.

Revenues for the quarter lifted 1 percent to USD 5.858 billion, with semiconductor solutions off 4 percent to USD 4.191 billion and infrastructure softrware up 19 percent to USD 1.667 billion. The net profit declined to USD 385 million or USD 0.74 per share, from 471 million or 1.12 per share but the adjusted EBITDA went higher meanwhile to USD 3.265 million from 3.236 million. The cash flow from operations and free cash flow improved to 2.322 billion and 2.214 billion, from 2.132 billion and 2.033 billion respectively. The company’s cash position of 6.444 billion was higher than the year before’s 5.055 billion.

Broadcom said it paid a cash dividend of USD 3.25 per share at end December, for a total of USD 1.297 billion, and a cash dividend of USD 20 per share of mandatory convertible preferred stock, for a total of USD 75 million.

Looking at its fiscal second quarter, the company is guiding for revenues of USD 5.7 billion, plus or minus USD 1.50 million and an adjusted EBTIDA of USD 3.135 billion, plus of minus USD 75 million. The cash dividend payable at end March will remain at USD 3.25 per share, as will the USD 20 per share dividend on its 8 percent mandatory convertible preferred stock.


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