Broadcom Inc (Nasdaq: AVGO) reported better than anticipated fiscal 2023 second-quarter results. The chip maker also issued a third-quarter revenue outlook that was ahead of Wall Street’s forecasts. Overall, the stock of Broadcom ended Thursday’s trading session at $812, up $22.05 or 2.79% from the prior close.
The San Jose, California-based Broadcom reported second-quarter revenues of $8.73 billion, an increase of 7.80% from $8.10 billion in the comparable quarter of fiscal 2022.
For the second quarter, which ended April 30, 2023, the company posted a net income of $3.48 billion, or $8.15 per share, compared with $2.52 billion, or $5.93 per share, in the quarter that ended May 1, 2022.
Excluding amortization of acquisition-related intangible assets, stock-based compensation expense, restructuring, impairment, and disposal charges, acquisition-related costs, and losses on investments, among others, Broadcom recorded Q2 2023 non-GAAP earnings of $4.49 billion, or $10.32 per share, up from $4 billion, or $9.07 per share, in Q2 2022.
Analysts surveyed by Wall Street anticipated Broadcom to post earnings of $10.08 per share on revenues of $8.71 billion.
Reflecting the boom in blockchain, AI, and other disruptive technologies, Hock Tan, President and CEO of Broadcom Inc., said “Broadcom’s second-quarter results were driven by demand for next-generation technologies from hyperscale, while enterprise and service providers continued to sustain.”
Segment wise:
- Semiconductor solutions revenue rose by 9% y-o-y to $6.808 billion.
- Infrastructure software revenues were $1.93 billion, an increase of 3% from last year.
Broadcom ended 2Q 2023 with cash and cash equivalents of $11.55 billion, down from $12.65 billion in 2Q 2022. Also, the company’s cash from operations was $4.50 billion in the second quarter. Furthermore, Broadcom’s capital expenditures were $122 million.
During the recent quarter, Broadcom returned $1.91 billion to investors by paying a cash dividend of $4.60 per share. The company also spent $3.42 billion repurchasing 5.60 million shares.
For the third quarter, Broadcom projects revenue of $8.85 billion, up 5% from last year. The Street analysts anticipate the company to post revenues of $8.71 billion for the reported quarter. The company also forecasts Q3 adjusted EBITDA of roughly 65% of projected revenues.
The quarterly earnings beat and robust Q3 revenue outlook are expected to keep the stock in an uptrend in the short term.
The historical price chart indicates that the stock of Broadcom has broken the resistance at 650. The next major resistance is anticipated to be near 850. Additionally, the stock is trading above its 50-day moving average while the MACD indicator is showing a positive reading. Therefore, we anticipate Broadcom’s stock to remain in an uptrend in the short term.
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