This week, Scott McGregor starts his third week on the job as chief executive of Irvine-based Broadcom Corp.
It’s early yet, but by McGregor’s own account, he’s got a lot of work to do. That was apparent at the International Consumer Electronics Show in Las Vegas earlier this month, where McGregor pressed the flesh with some of Broadcom’s largest customers.
“I was on the job at Philips on Friday and got on the job at Broadcom on Monday,” McGregor said at Broadcom’s CES get-together. “I’m just getting up to speed.”
McGregor, formerly chief executive of Philips Semiconductors, took over running Broadcom on Jan 3. He replaced Alan “Lanny” Ross, who himself replaced cofounder Henry “Nick” Nicholas in 2003.
Word is Ross already is back at his Montana ranch. McGregor is inheriting a company that isn’t “broken, dented or weak,” Ross said before leaving (he’s still a director).
McGregor has his own set of challenges: For the past few months, Broadcom has been grappling with a downturn in demand for its chips in servers and satellite TV boxes.
McGregor knows the feeling: Two days after announcing his exit from Phillips in September, he cut the unit’s third-quarter sales forecast.
At CES, Broadcom unveiled several chips related to wireless networking.
One allows you to add a phone to a wireless network. A wireless phone with the chip could link to a wireless fidelity, or Wi-Fi, home network instead of a service provider’s cellular network. The result could be lower wireless phone bills.
Broadcom also detailed a deal with Hewlett-Packard Co. and Linksys, an Irvine-based unit of Cisco Systems Inc., to make a wireless router that installs itself with the touch of a button.
Another chip displayed by Broadcom is for wireless phones. The chip allows for more detailed photos and video.
McGregor’s background is in software.
Before joining the chip arm of Netherlands-based Royal Philips Electronics NV, he was senior vice president and general manager at server software maker Santa Cruz Operation Inc. and worked at Xerox Corp.’s Palo Alto Research Center and at Microsoft Corp.
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Ingram Micro warehouse in Mira Loma: “We have convinced most of our customers in the past five years that they shouldn’t hold inventory,” Foster says |
Expensive Geday
What an expensive chief executive Armando Geday turned out to be for Newport Beach-based Conexant Systems Inc.
On top of his severance package, Geday’s tenure at the chip company might cause Conexant its share of headaches thanks to several lawsuits filed on behalf of Conexant shareholders.
Geday, Chairman Dwight W. Decker, who replaced Geday as chief executive, and accounting chief J. Scott Blouin were named in one suit, filed by New York law firm Milberg Weiss Bershad & Schulman LLP.
A handful of others also are in the courts.
The Milberg suit is similar to those seen after other companies have hit rough patches. It charges that representations about the company’s operations made in Conexant press releases were false and misleading because they failed to disclose some facts.
At issue is Conexant’s integration of GlobespanVirata, which it bought in 2004.
“Conexant and certain of its officers and directors made a series of material misrepresentations concerning Conexant’s earnings and integration with Globespan,” the lawsuit says. “Conexant repeatedly stated that the integration was successful when in fact there were significant problems.”
Last month, Conexant said it plans to continue paying Geday his yearly salary of $550,000 as a non-executive employee until June 30. Geday resigned for “personal reasons.”
Nod to Ingram
Santa Ana-based Ingram Micro Inc. got a nod from Barron’s earlier this month.
“The stock, recently changing hands at $20 and change, could have further upside, as corporate tech spending continues to pick up steam,” according to the story. “Analysts’ estimates have been trending higher in recent months, according to Thomson Fi-nancial/First Call, with the consensus pegging 2004 at 96 cents and 2005 at $1.23. Profits in the year just started could top that target if Ingram Micro benefits from the operating leverage created by its streamlining during the tech downturn.”
The story cites two years of cost cutting at the distribution giant as the catalyst for the company’s growth.
“We have convinced most of our customers in the past five years that they shouldn’t hold inventory,” Chief Executive Kent B. Foster told Barron’s. “They have outsourced a significant portion of their business to us because we take a lot of cost out of their supply chain.”
Earlier this year, Ingram said it expects to report net income of $53 million to $59 million for the fourth quarter. Sales in the period are set to be $7 billion to $7.3 billion.
Last year, Ingram closed its $530 million buy of Australia’s Tech Pacific from private equity firm CVC Asia Pacific Ltd.
