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Report: Broadcom to See $70M in Revenue from Apple in Second Half

A Wall Street analyst said Tuesday Irvine-based Broadcom Corp. could see roughly $70 million in revenue tacked on to its top line during the back half of the year from sales of Apple Inc.’s popular consumer gadgets.

FBR Capital Markets & Co. analyst Craig Berger said in a note to clients he sees Apple generating $30 million in revenue in the third quarter and another $40 million during the fourth quarter for Broadcom, which makes communications, radio and touch screen chips that go into the iPod, iPhone and iPad.

Broadcom should see a benefit as Apple builds up its inventory of gadgets ahead of the holiday season, Berger said.

“In the third quarter, Broadcom should benefit from the 3.5 million unit sequential increase in iPhone builds and the 2 million unit increase in iPad builds,” he said. In the fourth quarter, Broadcom should benefit from the 3 million unit increase in iPhone builds and the 3 million to 5 million unit increase in iPad builds.”

Berger reiterated his “outperform” rating on Broadcom’s shares and kept his $42 price target on the stock.

Broadcom was trading at about $33 per share on Tuesday on a recent market value of $17 billion.

Berger said he “remains favorable on Broadcom.”

“While shares are not as cheap as most peers, the market clearly expects continued revenue and earnings growth from Broadcom,” he said.

For the current quarter, Broadcom is looking to report sales of $1.7 billion to $1.8 billion, up roughly 40% from the same period a year earlier.

Berger sees revenues “tracking near the midpoint of its revenue guidance, better than many peers,” he said in a research note.

The company didn’t give a profit outlook. Analysts, on average, are looking for Broadcom to report third quarter profits of $347 million.

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