Shares of Irvine chipmaker Broadcom Corp. soared in afterhours trading on Thursday after the company beat analysts’ expectations for the fourth quarter.
The stock rose more than 12% in afterhours on a recent market value of about $12 billion.
Broadcom posted revenue of $1 billion, up 11% from the year-ago quarter and beating analysts’ expectations.
Excluding charges for stock compensation, research and development, acquisitions and other items, Broadcom saw profits of $201 million, up 9% from $185 million a year ago and beating analysts’ expected $173 million.
Including the charges, the chipmaker reported profits of $90 million, double the $45 million it saw during the same period a year earlier.
The company said it added $32 million in licensing fees during the fourth quarter from a deal it struck in July with cell phone service provider Verizon Wireless, a unit of New York’s Verizon Communications Inc.
The deal stems from Broadcom’s long-running feud over cell phone chip patents with San Diego chipmaker Qualcomm Inc.
The agreement 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.
Chief Executive Scott McGregor said Broadcom’s growth was driven by sales of chips that go into Bluetooth headsets and other gear, switches for wireless local area networks and digital televisions and set-top boxes, according to a company statement.
For the current quarter, Broadcom forecasts revenue of $975 million to $1 billion, in line with expectations.
The company also said that first-quarter gross margin would see a slight decline from the previous quarter as Broadcom continued to increase production of new products.
