Shares of Irvine-based Broadcom Corp. rebounded in afterhours trading after the company reported third-quarter results that beat Wall Street’s expectations and talked of reining in its costs.
Broadcom’s stock rose more than 4% in afterhours trading on a recent market value of about $7 billion.
Investors may have been cheered on by Chief Executive Scott McGregor’s remarks about reining in costs on a call with analysts.
Many on Wall Street have seen Broadcom’s spending as too high in previous quarters.
The company’s seen a couple of analysts downgrade the stock in recent months, citing higher costs and fears about shrinking margins.
For the third quarter, the maker of communications chips saw sales of $1.3 billion, up 37% from the same period a year earlier and in line with analysts’ estimates.
Broadcom said it got a boost to its top line from the $38 million it collected in royalties from Verizon Wireless, a unit of New York-based Verizon Communications Inc.
Excluding costs for stock compensation, acquisitions and other charges, Broadcom reported profits of $274 million, beating analysts’ expected $223 million.
Including the charges, the company saw profits of $165 million, up from $28 million during the same period a year ago.
For the current quarter, Broadcom is looking for sales of $1.2 billion to $1.24 billion, slightly lower than analysts’ expected $1.3 billion.
It didn’t give a profit outlook. Analysts are looking for profits of $213 million.
The company’s fourth-quarter outlook excludes results from its recent buy of Advanced Micro Devices Inc’s digital TV chip business.
Broadcom continued its move to make its financial results easier for Wall Street to interpret.
Earlier this year it reported results only according to generally accepted accounting principles.
In the past, the chipmaker has reported two sets of results, one as GAAP and the other non-GAAP.
This time around, Broadcom also included its outlook in its announcement, which it has typically only given in a post-earnings conference call.
Another first for the company was a breakout of its operating expenses for the quarter, including how much it paid out in research and development costs, salaries and legal fees.
