Wed, Apr. 22, 9:15 AM
Tue, Apr. 21, 5:37 PM
Tue, Apr. 21, 5:35 PM
- In addition to beating Q1 estimates, Broadcom (NASDAQ:BRCM) is guiding for Q2 revenue of $2.1B (+/- $75M), above a $2.07B consensus. Strong Galaxy S6 sales could be partly responsible - Broadcom is believed to supply a Wi-Fi/Bluetooth combo chip and a GPS/sensor hub IC. Continued iPhone 6 and data center hardware strength (driven by Web/cloud demand) might also be factors.
- Q1 gross margin (non-GAAP) was 54.4%, -30 bps Q/Q and +250 bps Y/Y, and slightly below a guidance midpoint of 54.7%. However, GM is expected to rise to 56% (+/- 75 bps) in Q2.
- In addition, R&D/SG&A spend is expected to drop ~$15M Q/Q (+/- $10M). Thanks to Broadcom's baseband modem exit, R&D spend was down 15% Y/Y in Q1 to $539M, and SG&A spend 4% to $177M.
- $335M was spent on buybacks, providing a lift to EPS. Broadcom established a $1B 2015 buyback authorization last December.
- BRCM +5.5% AH to $46.38, slightly topping a 52-week high of $46.31.
- Q1 results, PR
Tue, Apr. 21, 4:08 PM
Thu, Apr. 9, 9:52 AM
- CNBC's David Faber has reported Intel (NASDAQ:INTC) has ended talks to acquire FPGA vendor Altera due to a failure to agree on price. That has fueled speculation Intel will make a bid for Broadcom (NASDAQ:BRCM), which competes with Intel in several telecom/networking chip markets and complements the chip giant's offerings in many others.
- Also possibly helping Broadcom: Ladenburg Thalmann has launched coverage with a Buy rating and $51 target.
- With a current $26.3B market cap - a buyout price would likely have to be over $30B - Broadcom would be a big fish to swallow. Q1 results arrive on April 21.
Mon, Mar. 30, 12:44 PM
- "We've wanted to upgrade Broadcom (NASDAQ:BRCM) since the company's analyst meeting in Dec, but have been waiting for a pullback and a catalyst. We believe we got both last week," says Nomura's Romit Shah, upgrading the chipmaker to Buy and hiking his target by $10 to $50.
- Shah: "Broadcom remains very cheap, per our estimation, trading at 15x free cash flow (minus stock comp), versus a comp average of 18x. The discount reflects distrust in management after one bad acquisition and failed attempts in baseband." He thinks management isn't getting enough credit for recent moves to cut stock compensation spend (often criticized), boost capital returns, and increase financial transparency.
- Shares have gradually moved higher amid a 1% gain for the Nasdaq. They're within $2.50 of a 52-week high of $46.31. They moved higher during the final minutes of trading on Friday following reports Intel is in talks to acquire FPGA vendor Altera.
- Nomura downgraded Broadcom to Neutral last May, when shares were at $30.56.
Wed, Mar. 25, 3:57 PM
- With the Nasdaq down 2.3%, only a handful of tech companies are posting 2%+ gains. Meanwhile, the ranks of those posting 4%+ losses are considerable.
- Notable decliners include telecom/networking chipmakers Broadcom (BRCM -5.3%) and PMC-Sierra (PMCS -4.4%), chip equipment giant Applied Materials (AMAT -5.5%), optical component vendor Finisar (FNSR -6.7%), smart grid hardware/software vendor Silver Spring (SSNI -7.9%), Chinese app developer Cheetah Mobile (CMCM -4.4%), cable infrastructure/set-top vendor Arris (ARRS -4.8%), server OEM Super Micro (SMCI -5.8%), IP licensing firm Finjan (FNJN -13.8%), and cloud life sciences software leader Veeva (VEEV -5.7%).
- Broadcom, PMC-Sierra, and Applied Materials have joined a slew of other chip industry names in posting steep losses. Finjan is reversing yesterday's big gains. Cheetah Mobile, which sold off post-earnings last week, announced today's it's the lead investor in a $24M funding round for social/mobile ad platform Nanigans; the move follows the $58M purchase of French mobile ad network MobPartner.
- Previously covered: Solar stocks, Mobileye, GoPro, Groupon, On Track, Netlist, Baidu/Qihoo, AMD, Yingli, Lexmark/Kofax
Thu, Mar. 19, 5:52 PM
- After rising 5.8% in regular trading today, specialty analog/mixed-signal chipmaker Microsemi (NASDAQ:MSCC) is up 8% since announcing yesterday morning (just before its analyst day) it's buying Ethernet chipmaker Vitesse (NASDAQ:VTSS) for $389M. Shares have made new highs along the way.
- Vitesse closed today $5.31, $0.03 above Microsemi's offer price. Ascendiant Capital's Cody Acree calls the offer "a bit low," and (given the deal is expected to be immediately accretive for Microsemi) thinks a rival bid might arrive. "Potential suitors could include Broadcom (NASDAQ:BRCM) or Marvell (NASDAQ:MRVL), who are already leaders in Ethernet and would see natural synergies in VTSS’s portfolio or Avago (NASDAQ:AVGO) who has also been particularly acquisitive."
- Meanwhile, Stifel's Tore Svanberg has hiked his Microsemi target by $5 to $40 in response to the Vitesse deal and Microsemi's analyst day presentations (slides - .pdf). "[M]anagement reiterated its strategy to maximize profitability, grow its market share in core products, while expanding its [addressable market] through new product initiatives and deeper penetration into their existing customer base."
- Svanberg adds the Vitesse deal "helps expand [Microsemi's] silicon/dollar content initiatives, especially in the comms infrastructure space and adds differentiated technology with high barriers to entry." He sees the purchase making Microsemi's goal of achieving a 60% gross margin and 30% op. margin in 2016 (compares with 56.2% and 24.4% in calendar Q4) easier to attain.
Mon, Feb. 2, 10:13 AM
- Intel (INTC -0.7%) is acquiring Lantiq Semiconductor, a German developer of modem/transceiver chipsets and SoCs for home/office broadband hardware and carrier access equipment. Terms are undisclosed; presumably, the deal will be paid for with offshore cash.
- Lantiq's product line includes chips for DSL infrastructure gear, VoIP devices, GPON fiber-to-the-home networks, and DSL/Wi-Fi, Ethernet/Wi-Fi, and DSL/4G home gateways. The company has over 2K patents and design wins for hardware used on 100+ carrier networks.
- Intel declares the acquisition will "expand Intel's success in the cable residential gateway market and broaden its offering to other gateway markets, including DSL, Fiber, LTE, retail and IoT smart routers," and that pairing Intel's cable modem/gateway chip ops (i.e. the Puma line) with Lantiq's tech and talent "can allow global service providers to introduce new home computing experiences and enable consumers to take advantage of a more smart and connected home."
- Broadcom (BRCM -3.5%) isn't reacting well to the news. The company counts Intel as a major competitor in the cable modem/gateway and Wi-Fi chip markets (among others), and Lantiq as a major rival in the DSL and GPON chip markets. Shares rallied last Friday in response to Broadcom's Q4 beat.
- The purchase comes six months after Intel agreed to buy LSI/Avago's Axxia network processor unit (competes against Broadcom and several other firms) for $650M.
Fri, Jan. 30, 1:29 PM
- Following 16% Q/Q growth in Q3 (driven by iPhone-related orders), Broadcom's (BRCM +4.3%) broadband/connectivity chip sales only fell 2% Q/Q in Q4 to $1.475B, less than expected and driving the company's Q4 beat. Infrastructure/networking chip sales fell 4% Q/Q to $625M, in-line with expectations.
- On the CC (transcript), CEO Scott McGregor stated broadband/connectivity upside was "across the board, including set-top box, broadband access and particularly wireless connectivity." Wireless benefited not only from new phone launches, but also a growing mix of higher-ASP 802.11ac and 2x2 MIMO Wi-Fi combo chips.
- McGregor added Broadcom is "seeing significant customer interest in our 4x4 multiuser MIMO 5G WiFi chip targeted for retail routers, broadband access gateways and set-top boxes," and has scored its first wireless charging IC design win. Q1 broadband/connectivity segment sales are expected to be down Q/Q, in-line with seasonality.
- In infrastructure/networking, data center sales were stronger than enterprise (campus LAN) and carrier sales. Strong design win activity is claimed for both Broadcom's new 3.2Tbps StrataXGS Tomahawk switching chip. Segment sales are expected to be flat Q/Q in Q1.
- Q4 gross margin was 54.7%, +60 bps Q/Q and +240 bps Y/Y, and even with a guidance midpoint of 55% after factoring stock compensation. Thanks to job cuts and the baseband wind-down, R&D spend fell 18% Y/Y to $530M, and SG&A spend rose by just $1M to $173M. $104M was spent on buybacks.
- Q4 results/guidance, PR
Dec. 16, 2014, 1:19 PM
- Broadcom (BRCM -0.8%) has launched a solution for satellite outdoor units (ODUs) declared to be the first such offering to integrate GPS connectivity.
- The solution pairs Broadcom's BCM4551 satellite transmission IC with its BCM4771 GPS receiver IC. The 4551 is uses an advanced 28nm manufacturing process, and the 4771 integrates a baseband processor and CPU with RF circuitry; Broadcom claims an industry-leading circuit board footprint for the latter.
- Hard-luck rival Entropic (ENTR -9.1%) has plunged following the announcement. Entropic is only a month removed from announcing it's cutting 40% of its workforce, and plans to end set-top SoC product development after struggling to compete against Broadcom and STMicroelectronics.
Dec. 15, 2014, 9:41 AM
Nov. 26, 2014, 2:52 PM
- Chip stocks are outperforming after Analog Devices (ADI +5.2%) beat FQ4 estimates and offered in-line FQ1 guidance. The Philadelphia Semi Index (SOXX +1.9%) has made new highs.
- Notable gainers include many analog/mixed-signal and telecom IC firms: TXN +3%. LLTC +2.7%. SMTC +3.1%. ISIL +3.3%. SWKS +3.7%. AVGO +2.9%. OVTI +3.2%. FSL +3.1%. EZCH +2.5%. XLNX +2.3%. ALTR +2.1%. MX +4.3%. PMCS +2.7%. BRCM +2%.
- On its CC (transcript), ADI noted its telecom equipment chip sales are holding up well in spite of weak capex, aided by the fact its dollar content for 4G base stations is "at least 20% to 30% better" than for 3G base stations. The company also mentioned its lead times were stable in FQ4.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 31, 2014, 11:31 AM
- Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
- Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
- On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
- Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
- Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%. ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
- Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 22, 2014, 11:02 AM
- Broadcom (NASDAQ:BRCM) is above $40 after soundly beating Q3 estimates and providing better-than-feared Q4 guidance. On its CC (transcript), the company noted its Q3 beat was fueled by 16% Q/Q growth for its broadband/wireless connectivity chip reporting segment (67% of revenue).
- Wireless connectivity sales almost certainly got a lift (given Apple's numbers) from strong iPhone-related orders. The iPhone 6/6 Plus feature a Broadcom combo chip containing an 802.11ac Wi-Fi radio; 802.11ac parts carry higher ASPs than chips sporting 802.11n Wi-Fi radios (such as the one in the iPhone 5S).
- Broadband connectivity sales benefited from strong HD set-top IC sales (aided by share gains) for emerging markets designs. That appears to be giving a lift to set-top vendor/Broadcom client Arris (NASDAQ:ARRS) ahead of its Oct. 29 Q3 report.
- The networking/infrastructure chip segment's sales were roughly flat Q/Q at $651M, in-line with expectations. Data center and carrier-related sales both fell - soft telecom capex has taken a toll on many firms - while enterprise and home product sales rose. "Some pickup" is expected in carrier-related sales next year.
- During the Q&A, CEO Scott McGregor hinted Broadcom could announce new capital return plans during its Dec. 9 analyst day, given it now has over $2.7B in U.S. cash. $277M was spent on buybacks in Q3.
Oct. 22, 2014, 9:19 AM| 1 Comment
BRCM vs. ETF Alternatives
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.
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