Shares of Broadcom Corp. fell in afterhours trading Tuesday after the Irvine-based chipmaker provided a fourth quarter revenue outlook below Wall Street expectations.
Shares dipped 5% in extended trading to a market value of about $19.2 billion.
Investors looked past Broadcom’s strong third quarter earnings report and record revenue, seizing upon the company’s revenue outlook in the current quarter.
Broadcom projects revenue to fall between $1.7 and $1.8 billion in the December quarter.
Wall Street is forecasting revenue of about $2 billion in the fourth quarter.
The current outlook reflects “potential industry softness,” Broadcom Chief Executive Scott McGregor said.
The company said it also expects gross margins, a key measure for investors in assessing technology companies, to be flat or down slightly from the third quarter.
Gross margins were 50.9% in the September quarter, flat from a year ago.
Broadcom reported record revenue for the third quarter of $1.96 billion, up 8.4% from a year earlier and better than Wall Street expectations.
Analysts on average were expecting revenue of $1.95 billion.
Adjusted profits topped $476 million, up more than 4% from a year ago.
Wall Street had forecast profits of about $406 million.
In the current quarter, analysts are forecasting adjusted profits of $417.3 million.
Broadcom doesn’t typically provide an outlook on profit.
