Earnings Preview: Broadcom Reports Q4 Results Tuesday

| About: Broadcom Limited (AVGO)

Broadcom Corporation (BRCM) is scheduled to release last fiscal quarter's results after the closing bell on January 31, 2012. Let's take a look at how Broadcom has done in recent quarters. Broadcom Corporation designs and develops semiconductors for wired and wireless communications. The company was founded in 1991 and is headquartered in Irvine, California.

52 Week High: $46.75
52 Week Low: $27.59
Book Value: $11.44
Float Short: 2.17%

On average, 22 analysts are expecting a drop of $-0.17 in earnings per share compared to last quarter's results of $0.82. The number to beat is $0.65 per share, based on the estimated mean earnings. As in the last five quarters, I expect Broadcom to beat the mean estimate once again.

I would buy on weakness due to the price recently breaking above the 200 day moving average. Generally stocks will test the average at least once. $33.50ish should offer a relatively safe entry area based on what is known now. This whole year has been a solid run up so it should not be surprising if some profit taking happens. Selling covered calls may be an effective method of hedging some price and time risk.

In the last month, the stock has increased in price 18.75%, and changing from last year at this time -22.93%.
With a double digit gain compared to stocks in general, the stock shares did very well as compared to the overall stock market. When comparing to the S&P 500, the year up to date change is 14.75%.

Revenue year-over-year has increased to $6.82 billion for 2010 vs. $4.49 billion for 2009. The bottom line has rising earnings year-over-year of $1.08 billion for 2010 vs. $65.26 million for 2009.The company's earnings before interest and taxes are rising with an EBIT year-over-year of $1.08 billion for 2010 vs. $56.07 million for 2009. Rising revenue along with rising earnings is a very good sign and what we want to see with our companies. Be sure to check the margins in the earnings release to make sure that the bottom line is keeping up with the top line.

Here is a look at the fiscal year revenue.
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Here is the last few quarters to get an idea how well they perform compared to estimates
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Reported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for BRCM
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The number of days to cover short interest based on average daily trading volume for BRCM
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I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. You may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online, and Yahoo Finance for most of my data. I use the "confirmed" symbols from earnings.com that I believe to be of the most interest.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.