All eyes are on Irvine-based chipmaker Broadcom Corp., which saw its shares slide Monday after rival Texas Instruments Inc. reported first-quarter earnings that beat Wall Street’s expectations.
Broadcom’s shares slumped 5% in afterhours trading on a recent market value of about $11 billion.
Industry-watchers look to Texas Instruments as a bellwether to get an idea about how Broadcom might perform.
Good results from Dallas-based Texas Instruments could mean the company is holding its own in a rivalry with Broadcom for wireless phone chips.
Texas Instruments posted an adjusted profit of $17 million on sales of $2.09 billion.
Analysts, on average, were looking for a loss of $38 million on sales of $1.9 billion.
In an unusual move, Broadcom said Monday afternoon that it plans to report first-quarter results at the opening of trading on Tuesday.
Typically, the company reports after the close of New York trading.
Some speculate the company could have strong results to report and wants to get the news out at the market’s open.
Analysts are looking for Broadcom to post profits of $15 million on sales of $848 million.
Investors and analysts have been fairly bullish on chipmakers.
“Many chip firms have made deep cuts to headcount, operating expense spending and fabrication sites, such that their business models could be almost as profitable as before, in many cases, but at vastly lower revenue levels,” said Craig Berger, analyst at FBR Capital Markets & Co. said in a research note.
“While revenues may still be depressed relative to 2007-2008 levels, we think earnings forecasts can rise meaningfully from current levels,” Berger said.
Broadcom’s shares are up some 20% since the start of the year.
Berger said he expects Broadcom to beat its own sales outlook for the first quarter and up its expectations for the current quarter.
He’s looking for the company to report profits of $25 million on sales of $872 million.
