Broadcom Corporation
 (BRCM)

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  • Wed, Jan. 27, 10:24 AM
    • Along with its Q4 results, Q1 guidance, and restructuring plans, STMicroelectronics (STM +4%) says it's cutting 1,400 jobs - 430 in France through a voluntary departure plan, 670 in Asia, and 120 in the U.S. The company expects $170M/year in savings and $170M in restructuring costs.
    • Along with the job cuts, STMicro says it's discontinuing "the development of new platforms and standard products" for its set-top and home gateway IC lines. 600 employees will be redployed from the company's set-top chip ops to "support principally ST's growth ambitions in digital automotive and microcontrollers."
    • STMicro: "The slower than expected market adoption of leading-edge products and increasing competition on low-end [set-top] boxes, combined with the required high level of R&D investment, has led this business to generate significant losses in the course of the last years." Broadcom (BRCM -0.1%), which is due to officially be acquired by Avago (AVGO -3.1%) on Feb. 1, has been STMicro's top rival in the set-top/home gateway IC space, and stands to benefit from STMicro's move.
    • The French government has responded to the news by stating STMicro needs a new strategy. Spokesman Stephane Le Foll: "We want a new strategy put in place to allow this company to create value and recover."
    • STMicro continues trading higher post-earnings. Avago is joining other iPhone/iPad suppliers in selling off following Apple's earnings/guidance. the Nasdaq is down 1.2%.
    | Wed, Jan. 27, 10:24 AM | 1 Comment
  • Thu, Jan. 7, 4:22 PM
    • Qorvo and Cirrus Logic have both issued calendar Q4 warnings after the bell, and indicated calendar Q1 sales will also be soft. The warnings come in the wake of reports indicating Apple has cut iPhone production and component orders.
    • Fellow iPhone suppliers are selling off in response. Skyworks (NASDAQ:SWKS) -4% after hours. Avago (NASDAQ:AVGO) -4.3%. NXP (NASDAQ:NXPI) -1.6%. InvenSense (NYSE:INVN) -2.5%. Broadcom (BRCM - set to be acquired by Avago) -1.3%. Synaptics (NASDAQ:SYNA) -1.7%. Jabil (NYSE:JBL) -0.7%.
    • Many of the aforementioned names had already seen steep losses in regular trading, as the Nasdaq fell 3% amid a broad market selloff.
    | Thu, Jan. 7, 4:22 PM | 46 Comments
  • Dec. 3, 2015, 9:15 AM
    | Dec. 3, 2015, 9:15 AM
  • Dec. 2, 2015, 5:40 PM
    | Dec. 2, 2015, 5:40 PM
  • Dec. 2, 2015, 5:02 PM
    • Avago (NASDAQ:AVGO) has jumped to $142.24 after hours after beating FQ4 EPS estimates, posting in-line revenue, and issuing FQ1 sales guidance that was below consensus but better than feared in light of soft guidance from other chipmakers and reports of Apple component order cuts. Merger partner Broadcom (NASDAQ:BRCM) has risen to $57.47.
    • Financials: Lifting FQ4 EPS: Gross margin (non-GAAP) was 62%, up from 61% in FQ3 and 58% a year ago, and above a guidance midpoint of 60.5%. FQ1 GM guidance is at 61% (+/- 1%). Operating expenses rose 12% Y/Y to $338M, slightly topping guidance of $336M. Avago ended FQ4 with $1.82B in cash, and $3.9B in debt.
    • Top-line performance: Wireless communications chip sales (37% of revenue, driven in FQ4 by iPhone orders) rose 10% Q/Q and 8% Y/Y. Enterprise storage (LSI/Emulex, 35% of revenue) rose 9% Q/Q and 38% Y/Y; the Emulex purchase boosted Y/Y growth. Wired infrastructure (optical components, 20% of revenue) rose 2% Q/Q and 7% Y/Y. Industrial/other (8% of revenue, hurt by inventory correction) fell 10% Q/Q and 7% Y/Y.
    • Avago's results/guidance, PR
    | Dec. 2, 2015, 5:02 PM | 1 Comment
  • Oct. 26, 2015, 10:52 AM
    • Apple suppliers Qualcomm (QCOM -2.9%), Cirrus Logic (CRUS -10.1%), Skyworks (SWKS -5.1%), Qorvo (QRVO -5%), Avago (AVGO -4.2%), Broadcom (BRCM -2.3%), NXP (NXPI -3.5%), InvenSense (INVN -2.1%), Synaptics (SYNA -4.4%), and Analog Devices (ADI -2.7%) are selling off after iPhone/iPad power management IC supplier Dialog Semi (down 18.8% in Frankfurt) reported 18% Y/Y Q3 revenue growth and guided for annual Q4 growth to be in a range of -1% to +6%. Both the Q3 sales and Q4 guidance missed consensus estimates.
    • NXP merger partner Freescale (FSL -2.9%) is also lower. As is Atmel (ATML -8.1%), which is set to merge with Dialog in a cash/stock deal. Atmel was originally due to receive over half its payout in Dialog shares, whose value has fallen considerably since the deal was announced in mid-September.
    • Broadcom, set to merge with Avago, reports after the bell. Apple reports tomorrow, and Cirrus, NXP, and InvenSense on Wednesday. With the help of improving demand and ongoing M&A, chip stocks had bounced strongly from their August/September lows in recent weeks.
    | Oct. 26, 2015, 10:52 AM | 19 Comments
  • Oct. 6, 2015, 12:57 PM
    • Skyworks (NASDAQ:SWKS) has tumbled towards $75 after announcing it's buying storage and telecom IC vendor PMC-Sierra (NASDAQ:PMCS) for $2B in cash on hand. (PR)
    • Fellow RF chipmaker Avago (AVGO -6.7%), which (thanks to the LSI acquisition) competes against PMC-Sierra in the storage controller market, is also off, as is merger partner Broadcom (BRCM -3.2%), which competes against PMC to an extent in the telecom IC and network processor markets. RF peer Qorvo (QRVO -3.3%) is also getting hit. The Nasdaq is down 1.2%.
    • Possibly hurting the group: Skyworks has used the PMC deal to announce it expects FQ4 (calendar Q3) revenue of $880M and EPS of $1.52. That's slightly above prior guidance of $875M and $1.51 and a consensus of $876M and $1.51, but expectations have been high following a long string of beat-and-raise quarters.
    • The PMC acquisition expands Skyworks' reach to a slew of non-RF chip markets and enterprise/telecom infrastructure end-markets. It's expected to yield $75M in cost synergies within 12 months of closing (expected in 1H16), and subsequently boost Skyworks' annual EPS by $0.75. Assuming that target is hit, Skyworks is paying 14x forward EPS.
    • Update (1:04PM ET): BofA/Merrill is defending Skyworks and Avago, arguing forward P/Es of less than 10 make shares very cheap.
    • Update 2 (5:01PM ET): The group staged a comeback in afternoon trading. Skyworks closed down 1.4%, Avago 3.4%, Qorvo 1.1%, and Broadcom 1.6%. The Nasdaq closed down 0.7%.
    | Oct. 6, 2015, 12:57 PM | 9 Comments
  • Aug. 26, 2015, 4:44 PM
    • Avago (NASDAQ:AVGO) has guided for FQ4 revenue of $1.85B (+/- $25M), slightly below a $1.86B consensus at the midpoint. However, expectations were relatively low, given the soft guidance many chipmakers have provided in July/August.
    • Segment performance: FQ3 wireless communications revenue (RF components, boosted by iPhone growth and 4G-driven share gains) rose 7% Q/Q and 69% Y/Y, and made up 35% of revenue. Enterprise storage (boosted by the Emulex acquisition) rose 26% Q/Q and 46% Y/Y, and was 34% of revenue. Wired infrastructure fell 3% Q/Q and rose 7% Y/Y, and was 21% of revenue. Industrial/other fell 21% Q/Q and rose 2% Y/Y, and was 10% of revenue.
    • Financials: Gross margin was 61%, flat Q/Q and up 400 bps, and above a guidance midpoint of 60%. FQ4 GM guidance is at 60.5% (+/- 1%). M&A-related cost cuts resulted in operating expenses rising only 7% Y/Y to $330M. Avago ended FQ3 with $1.4B in cash, and $3.9B in debt.
    • Avago is up 2% after hours to $118.35. Shares rose 7.1% in regular trading ahead of earnings amid a giant market rally. Merger partner Broadcom (NASDAQ:BRCM) rose 5.6%.
    • FQ3 results, PR
    | Aug. 26, 2015, 4:44 PM
  • Aug. 6, 2015, 9:53 AM
    • Qualcomm (QCOM -0.5%), via its Atheros Wi-Fi/connectivity chip unit, is buying DSL modem/infrastructure IC and home gateway processor vendor Ikanos (NASDAQ:IKAN) for $2.75/share, or roughly $47M based on Ikanos' Q2 diluted share count. The price represents a 57% premium to Ikanos' Wednesday close. The deal is expected to close by year's end.
    • Ikanos' products complement Qualcomm/Atheros home Wi-Fi and wireline networking offerings. Qualcomm: "The combination of Qualcomm Atheros' broad home gateway IP portfolio, including Wi-Fi, powerline, small cell, and Ethernet switch technologies, and Ikanos' advanced wired modem technology, is designed to create a complete solution for a wide range of home gateway products to better serve the carrier segment." Broadcom (NASDAQ:BRCM) and Marvell (NASDAQ:MRVL) are among the other companies competing in this space.
    • Qualcomm CEO Steve Mollenkopf suggested last week his company would make new chip acquisitions.
    | Aug. 6, 2015, 9:53 AM | 1 Comment
  • Jul. 30, 2015, 6:33 PM
    • On top of missing Q2 estimates, Broadcom (NASDAQ:BRCM) has guided for Q3 revenue of $2.135B (+/- $75M), below a $2.24B consensus. But with many other chipmakers having already issued soft Q3 outlooks, and Broadcom's shares now effectively linked to Avago's, the numbers are being taken in stride.
    • Q2 gross margin was 56.6%, +220 bps Q/Q and +170 bps Y/Y, and above a guidance midpoint of 56%. Q3 is expected to drop to 55.3% (+/- 75 bps) in Q3. R&D spend fell 15% Y/Y to $538M thanks to Broadcom's baseband modem exit, while SG&A spend rose 3% to $188M. $128M was spent on buybacks.
    • Separately, the WSJ reports the IRS has declined to promise the stock portion of Avago's (NASDAQ:AVGO) pending $37B deal to merge with Broadcom will be a tax-free transaction for Broadcom shareholders. However, if Avago ($35B market cap) remains larger than Broadcom ($31B market cap), the stock portion will be tax-free. Either way, Broadcom shareholders will owe taxes on the deal's $17B cash payout.
    • Should the stock portion of the deal be taxable, Avago plans to offer Broadcom investors tax-deferring units instead of stock. That would let investors decide when to make tax payments.
    • BRCM +0.6% AH. AVGO -0.9%.
    • Broadcom's Q2 results, PR
    | Jul. 30, 2015, 6:33 PM | 1 Comment
  • Jul. 21, 2015, 5:10 PM
    • Apple beat FQ3 estimates, but reported slightly below-consensus iPhone unit sales of 47.5M. In addition, FQ4 revenue guidance of $49B-$51B was below a $51.1B consensus. iPhone revenue was up 59% Y/Y, while iPad revenue fell 23%.
    • iPhone/iPad chip suppliers are selling off in response. Cirrus Logic (NASDAQ:CRUS) -5.6% AH. Skyworks (NASDAQ:SWKS) -6.8%. Qorvo (NASDAQ:QRVO) -6.4%. Avago (NASDAQ:AVGO) -3.8%. Broadcom (BRCM - merging with Avago) -1.3%.  InvenSense (NYSE:INVN) -4%. NXP (NASDAQ:NXPI) -3.4%.
    | Jul. 21, 2015, 5:10 PM | 26 Comments
  • Jul. 7, 2015, 1:10 PM
    • RF chipmakers Skyworks (SWKS -3.8%), Qorvo (QRVO -4.1%), and Avago (AVGO -3.2%) are posting 3%+ declines on what's proving a rough day for many high-beta tech stocks.
    • With Chinese equities plunging, Skyworks, Qorvo, and Avago's Chinese exposure could be contributing to their selloff. The Nasdaq is down 0.7%, and the Philadelphia Semi Index 1.7%.
    • Avago's decline comes as Oppenheimer's Rick Schafer downgrades merger partner Broadcom (BRCM -2%) to Market Perform. Curiously, he also declares Avago (along with Skyworks) to be a top wireless chip pick.
    • Schafer: "Rising RF complexity (and content) remains one of our favorite thematic plays heading into 2H15 ... We see incremental RF content opportunities for both Avago and Skyworks on the forthcoming iPhone 6S ... Skyworks further benefits from 50 percent plus 4G reference design share with China's major baseband suppliers."
    • Broadcom shareholders are set to receive either $54.50/share in cash, 0.4378 Avago shares for each Broadcom share, or some combination thereof, with the cash portion of the deal totaling $17B. Broadcom currently trades 7% below the cash payout price, and (based on Avago's current trading levels) 11% below an equity payout price of $56.87.
    | Jul. 7, 2015, 1:10 PM | 16 Comments
  • May 28, 2015, 1:34 PM
    • In a presentation (.pdf) discussing their planned merger, Avago (AVGO -0.4%) and Broadcom (BRCM -2.6%) state they're aiming for a 40% long-term op. margin, up from the 30% collectively possessed by the companies today. Gross margin is forecast to rise to 60% from a current 57%, and R&D and SG&A spend respectively fall to 16% and 4% of revenue from 20% and 7%.
    • Avago and Broadcom, who have $15.1B in revenue between them, are only forecasting a 5% long-term revenue CAGR. However, Avago CEO Hock Tan states the outlook is "probably conservative."
    • Avago plans to partly finance the $17B cash portion of the deal via $9B worth of new debt. The post-merger company is expected to have $15.5B in debt and $1.3B in cash; Broadcom shareholders will have a 32% stake. The deal is expected to close in Q1 2016.
    • Many potential product synergies exist. Among the possibilities: Wi-Fi/Bluetooth solutions that pair Broadcom's combo chips with Avago RF components; server/storage connectivity product lines featuring a mixture of Broadcom's Ethernet transceivers and switching chips and Avago's adapter cards and optical transceivers - Stifel thinks Mellanox (MLNX -0.3%) could be at risk here - and telecom equipment product lines that combine Broadcom's network processors and switching chips with Avago's optical components.
    • Meanwhile, in its FQ2 report (issued in tandem with the merger announcement), Avago has guided for FQ3 revenue of $1.74B (+/- $25M), above a $1.68B consensus. The company reported a 66% Y/Y increase in FQ2 wireless chip revenue (aided by strong Apple/Samsung demand), along with 74% and 64% increases in wired infrastructure and industrial/other revenue (lifted by both organic growth and M&A).
    | May 28, 2015, 1:34 PM
  • May 27, 2015, 2:26 PM
    • The WSJ reports Broadcom (BRCM +16.6%) is "in advanced talks to be bought" by Avago (AVGO +6.4%). Shares of both companies have shot higher.
    • A deal would effectively be a merger rather than an acquisition: Avago is currently worth $35.1B, and Broadcom $32B. The post-merger company would have a massive product line spanning a variety of mobile, networking, home electronics, and telecom equipment chip markets.
    • Avago has bought a string of companies over the last 18 months amid a massive chip industry consolidation wave, and has been rumored to be eying several others.
    • Update (3:37PM ET): Bloomberg is backing up the WSJ's report, while adding a deal could be announced as soon as tomorrow.
    • Update 2 (3:50PM): CNBC reports Avago's board plans to vote on the deal tonight.
    | May 27, 2015, 2:26 PM | 8 Comments
  • May 27, 2015, 12:59 PM
    • Competitive fears for Broadcom's (BRCM +2.1%) Wi-Fi combo chip ops (largely Qualcomm-related) are overblown, argues BofA/Merrill while reiterating a Buy rating and $54 target.
    • Among BofA's arguments: 1) Broadcom's combo chips are still best-in-class, and discrete solutions are preferred on the high-end rather than ones integrated with baseband processors. 2) Broadcom maintains a ~57% combo chip share, and has ~1K dedicated engineers for the business. 3) With combo chips sporting a ~$4 ASP, there's little need for OEMs to get frugal. 4) Broadcom's baseband market exit opens the door to partnerships with former baseband rivals such as Spreadtrum. 5) 802.11ac/dual-band Wi-Fi chips and location hub support (found in Broadcom's Galaxy S6 design) can boost ASPs, and IoT products can increase Broadcom's addressable market.
    • The firm also expects Broadcom (aided by its recently-launched Tomahawk switching chip) to benefit from a 25G Ethernet upgrade cycle, and notes the company's set-top chip share gains against STMicroelectronics. It forecasts 2017 EPS of $4 (the 2015 consensus is only at $3.01), and thinks a $61-$75/share valuation is possible on a sum-of-the-parts basis.
    | May 27, 2015, 12:59 PM
  • Apr. 22, 2015, 9:15 AM
    | Apr. 22, 2015, 9:15 AM
Company Description
Broadcom Corp is provider of semiconductors for wired and wireless communications. It provides a portfolio of SoCs that seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environments.