Broadcom Shares Up 6% On Strong Outlook

(RTTNews) - Chipmaker Broadcom Ltd (AVGO), the company created following the merger of Avago Technologies and Broadcom Corp., Thursday issued an outlook for the third quarter revenues that is expected to beat estimates, sending its shares up 6 percent in the after-hours trading.

The company expects third-quarter revenues of $3.75 billion, plus or minus $75 million. Analyst currently estimate revenues of $3.71 billion.

The Singapore-based chip maker's second-quarter loss was $1.26 billion or $3.02 per share compared to profit of $344 million or $1.21 per share last year.

Adjusted earnings for the quarter rose to $2.53 per share from $2.13 per share last year. Analysts polled by Thomson Reuters estimate earnings of $2.38 per share.

Net revenues for the quarter increased to $3.54 billion from $1.61 billion last year. Analysts had a consensus revenue estimate of $3.55 billion for the quarter. Gross margin dropped to 30 percent from 52 percent last year.

Broadcom Corp. (BRCM) was acquired by Avago Technologies Limited (AVGO) for $37 billion, with Avago keeping the name Broadcom for the combined company. The acquisition announced in May 2015 was the biggest merger between two chipmakers.

"We delivered solid second quarter revenue, while exceeding EPS expectations for our first quarter operating as a combined company. Our increased scale and diversity is already proving very resilient, with strong product cycles in our now largest segment, wired, offsetting weaker demand in our enterprise storage and wireless segments," said CEO Hock Tan.

AVGO closed Thursday's trading at $154.91, up $0.14 or 0.09%, on the Nasdaq. The stock further gained $9.49 or 6.13% in the after-hours trading.