Broadcom reports bullish first quarter sales, unveils $ 10 billion buyout plan

The Broadcom company logo is displayed outside one of their office complexes in Irvine, California, United States, March 4, 2021. REUTERS / Mike Blake / File Photo

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Dec. 9 (Reuters) – Semiconductor company Broadcom Inc (AVGO.O) forecast first-quarter revenue above Wall Street expectations and on Thursday announced a $ 10 billion share buyback plan, betting on a rebound in corporate spending and sustained demand from cloud computing companies.

The company’s shares rose 6.6% to $ 622 in extended trading.

Analysts pointed to strong near-term demand for Broadcom’s radio frequency and wireless chips, as carriers spend more to deploy 5G technology and maintain the strength of its broadband division. The company counts smartphone giants Apple Inc (AAPL.O) and Samsung Electronics (005930.KS) among its major customers.

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Broadcom is also poised to benefit from increased demand for its data center and server chips, aided by an increase in hybrid work models and a rapid move to the cloud by businesses during the pandemic.

Business demand has rebounded sharply by over 30% in the current quarter, while semiconductor solutions revenue is expected to grow 17% in the current quarter, CEO Hock Tan said during the report. a conference call with analysts.

The San Jose, Calif.-Based company is forecasting about $ 7.60 billion in first-quarter revenue, well above analysts’ average estimate of $ 7.25 billion, according to the reports. data from Refinitiv.

Fourth-quarter revenue rose 15% to $ 7.41 billion, narrowly beating estimates of $ 7.36 billion, while earnings per share of $ 7.81 were also better than expected .

Broadcom has also branched out beyond its core chip business and forayed into the lucrative software arena at a time when the world is grappling with supply chain disruptions and a shortage of industry-wide chips. Its infrastructure software revenue rose 8% to $ 1.77 billion in the fourth quarter.

The new share buyback program is effective until the end of next year, the company said in a separate statement.

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Reporting by Akash Sriram and Eva Mathews in Bangalore; Edited by Ramakrishnan M.

Our standards: Thomson Reuters Trust Principles.

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