Irvine-based chipmaker Broadcom Corp. on Wednesday reported fourth-quarter earnings that beat Wall Street’s expectations but didn’t impress investors.
Broadcom saw sales of $1.34 billion, up 19% from a year earlier and slightly ahead of analysts’ expected $1.32 billion in sales.
Excluding charges for stock compensation, income taxes and other onetime costs, the company posted $243 million in profits, up 53% and beating analysts’ expectation of $218 million in profits.
“In the midst of one of the worst economic downturns, Broadcom gained market share, achieved record quarterly revenue and delivered the strongest cash flow from operations in our history,” Chief Executive Scott McGregor said.
The company took a hit to net earnings with a onetime payout of $161 million to settle a class action lawsuit related to improperly backdated stock option grants.
Investors shrugged off the results from the chipmaker, as they have with other companies this earnings season.
Broadcom’s shares were down 3% in afterhours trading on a recent market value of $14 billion.
At this stage in the recovery, investors seem to be expecting companies to top expectations and aren’t giving their stocks any bounce for doing so.
Investors also may be awaiting a forecast for the current quarter in Broadcom’s conference call due shortly.
In a separate announcement Wednesday, Broadcom said next month it’s set to start paying shareholders a regular quarterly dividend.
Next month, shareholders are set to get a dividend of 8 cents per share, for a total payout of around $400 million.
“The adoption of a dividend policy is another step in our continued efforts to adopt shareholder friendly initiatives and encourage new and long-term investments in Broadcom,” McGregor said.
The move is seen by some as a continuation of Broadcom’s efforts over the past year or so to usher in more normative accounting principals and transparency for the benefit of investors and Wall Street.
It’s a bit unusual for a tech company, which typically aim to conserve cash for acquisitions and research.
The company ended the year with about $1.4 billion in cash.
Broadcom makes chips for computers, cell phones, networking gear and other consumer electronics.
Its chips are found in Apple Inc.’s iPhone and iPad tablet computer, Nintendo Co.’s Wii and a slew of flat-screen digital televisions, among many other devices.
Also on Wednesday, Broadcom disclosed that it did a small deal to build up its Ethernet chip business with the acquisition of Petaluma-based Teknovus Inc.
Broadcom said it paid $123 million in cash for Teknovus, which makes chips and software for a technology that allows broadband data connections speeds of 10 gigabits per second over fiber optic cables.
