Irvine chipmaker Broadcom Corp. reported a big drop in profits and a slide in sales for the second quarter with results that were in line with Wall Street’s modest expectations.
The company cited “variability” in orders from big customers for the declines.
Sales were $898 million, down about 5% from a year earlier. Analysts on average had expected about $900 million in sales.
Broadcom earlier forecast revenue of $890 million to $905 million.
Profits were about $34 million, down 68% from a year earlier. The figure includes costs for research and development, stock compensation, acquisitions and other items.
Without those, Broadcom earned $162 million, in line with expectations.
In May, Chief Executive Officer Scott McGregor gave a murky outlook that sent shares tumbling, citing weak demand from customers who buy Broadcom’s Bluetooth chips for wireless keyboards, earpieces and other devices.
For the current quarter, Broadcom said it expects revenue of $915 million to $940 million, which would mark a return to sequential quarterly sales growth.
In a separate announcement, Broadcom said it signed a licensing deal with mobile phone carrier Verizon Wireless, a unit of New York-based Verizon Communications Inc.
The deal gets around part of a long running dispute between rival mobile phone chipmaker Qualcomm Inc. of San Diego.
The deal allows Qualcomm’s chips, which were found to infringe Broadcom’s patents, to continue to be built into Verizon’s phones and be sold in the U.S.
Verizon agreed to pay Broadcom $6 for each device it makes that contain Qualcomm chips.
Verizon can pay Broadcom up to $40 million a quarter and up to $200 million for the life of the agreement, according to the terms of the deal.
Qualcomm has rejected a similar settlement deal with Broadcom.
