Shares of Irvine-based communications chipmaker Broadcom Corp. jumped Wednesday , a day after industry bellwether Intel Corp. gave a better than expected outlook for the current quarter.
Analysts and investors look to Intel, which reported first-quarter results after the close of trading on Tuesday, as an early indicator of how other chipmakers are likely to perform.
Broadcom’s shares closed up more than 3% on a recent market value of $18 billion.
Intel said it’s looking for second-quarter sales of $9.8 billion to $10.6 billion, beating analysts’ expected $9.7 billion in sales.
It didn’t give a profit outlook. Analysts, on average, are expecting Intel to post $2 billion in second quarter profits.
For the first quarter, Intel reported $2.4 billion in profits, nearly quadruple its profits during the year-ago period, on $10 billion in revenue, up 44% from the year-ago quarter.
Intel’s “very robust 1Q results—arguably blowout results—reflecting strong global demand (led by Asia), new product strength, minimal competitive threats, and a leaner operating structure, resulted in the strongest 1Q ever,” said Craig Berger, analyst at FBR Capital Markets Inc., in a research note.
That’s promising for Broadcom, which is set to report first-quarter results on April 27.
Analysts, on average, are expecting Broadcom to post profits of $233 million, more than five times the year-ago figure, on sales of $1.4 billion, which represents a gain of 62% from a year earlier.
Broadcom’s chips go into computers, TV set-top boxes, consumer electronics and cell phones, among other devices.
Last week, the company was confirmed to have chips in Apple Inc.’s latest toy—the iPad tablet.
