Broadcom Shares Rise on Upped OutlookWednesday, December 14, 2011
Irvine-based chipmaker Broadcom Corp.’s shares rose today after it raised its outlook on revenue and gross margins for the current quarter.
Broadcom said its expects $1.8 billion in revenue for the quarter. Analysts on average had expected $1.77 billion, and the slightly better projection appeared to be welcome reassurance for investors.
Gross margins are expected to hit the top range of earlier guidance, staying about event with the 51.1% mark of the third quarter.
Broadcom's shares closed up about 1% after rising more than 3% earlier in the day on the news, to a market value of about $15.3 billion.
Broadcom Chief Executive Scott McGregor attributed the strong outlook on sales and margins to “solid shipments and tight operational management."
Strong sales of Apple Inc.’s iOS and Google Inc.’s Android phones are believed to be main factors in the gain on revenue.
Separately, recent reports have Broadcom Corp. eyeing Israel for another acquisition.
The company has reportedly signed a letter of intent to purchase Israeli networking and embedded processor developer Broadlight Ltd. for more than $200 million, according to the daily business site themarker.com. A Broadcom spokesperson declined comment.
Broadcom is a frequent acquirer, and it has acquired several Israel-based companies in recent years.
Talk of the deal for Broadlight comes as Broadcom is expected to wrap up a $3.7 billion deal for Netlogic Microsystems Inc. in Santa Clara, which is expected to close in the first half of next year.