Seeking Alpha

Broadcom +10% on strategic alternatives news; strong guidance

  • The company has hired JPMorgan to help explore strategic alternatives for its cellular baseband business, including a sale or wind-down.
  • Either action could be expected to save about $600M in annualized R&D and SG&A expenses, says Broadcom (BRCM), after filtering out reductions in stock-based compensation.
  • Along with the news, Broadcom updates its outlook for the quarter ending this month, continuing to expect revenue of $2-$2.1B, but now seeing product gross margin to be at or above the high end of previous guidance.
  • Source: Press Release
  • Shares +10.7% premarket
From other sites
Comments (8)
  • alpine
    , contributor
    Comments (1452) | Send Message
     
    I assume the likes of QCOM, AVGO, SWKS, ANAD and RFMD will be beneficiaries by their exit?
    2 Jun 2014, 07:56 AM Reply Like
  • defunkdreader
    , contributor
    Comments (96) | Send Message
     
    I'd say it's more INTC, MRVL, Spreadtrum; the other baseband challengers to QCOM. Broadcom didn't win much in baseband anyways so short-term benefits to competitors should be almost non-existent.
    2 Jun 2014, 12:02 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (2993) | Send Message
     
    reductions in compensation is great news. Executive pay increases have continued while stock price has floundered. Its about time!
    2 Jun 2014, 08:24 AM Reply Like
  • SivBum
    , contributor
    Comments (2027) | Send Message
     
    The guys at the top always get their cuts first before killing off R&D:

     

    Either action could be expected to save about $600M in annualized R&D and SG&A expenses, says Broadcom (BRCM), after filtering out reductions in stock-based compensation.
    2 Jun 2014, 09:10 AM Reply Like
  • defunkdreader
    , contributor
    Comments (96) | Send Message
     
    Don't forget to mention 3000 engineer heads may roll. (call transcript)
    2 Jun 2014, 12:03 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1210) | Send Message
     
    Another LTE baseband hopefull bites the dust. It continues to amaze me how much advantage Qualcomm have in this field.
    2 Jun 2014, 11:58 AM Reply Like
  • 7of9
    , contributor
    Comments (368) | Send Message
     
    Is Intel next to exit?
    2 Jun 2014, 02:20 PM Reply Like
  • defunkdreader
    , contributor
    Comments (96) | Send Message
     
    No.
    Back in November, Krzanich (Intel CEO) said he'd eat $800m in operating expense (in 2014) to bring more competitive mobile chips to market.
    2 Jun 2014, 02:36 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs