Broadcom Earnings Lifted by Sector Comeback, 3D TV Trend

Posted Apr 28th 2010 3:00PM by Tom Taulli
Filed under: Broadcom Corp'A' (BRCM)

There was little to complain about Broadcom's (BRCM) first quarter results. Revenues hit a record of $1.46 billion, up 71% from the same period a year ago. The consensus was for $1.38 billion. Also, Broadcom posted earnings of $210 million, or $0.40 per share, which compares to a loss of $92 million, or $0.19 per share in last year.

On the news, the shares of the company were up 4% to $36.31 in Wednesday morning trading.

As seen with the reports from companies like Intel (INTC) and Texas Instruments (TXN), the semiconductor industry is making a strong comeback. Of course, it helps that Broadcom also provides chips for fast-growing companies like Apple (AAPL) and Nintendo.

Besides its strong set-top business, Broadcom is also getting a lift from home networking and chips for high-definition broadcasts. Interestingly enough, it looks like the company is benefiting from the trend towards 3D television as well.

A key to Broadcom's strategy has been selective acquisitions, such as with Dune and Teknovus. And with $2.4 billion in cash, the company is nicely positioned to do more deals.

Going forward, Broadcom expects strong momentum, with Q2 revenues forecast to range from $1.535 billion to $1.635 billion, which could prove conservative. Thus, there may be more upside in the stock.

Tom Taulli advises on business tax preparation and is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.

Tags: BRCM, Broadcom, featured, inthenews, semiconductors