Chips Ahoy: Broadcom Kills Estimates
There are stocks -- and then there are stocks. Stocks that kiss the sky and have you drooling over your account statement.Chip maker Broadcom (BRCM) is white hot, and on Friday it threw earnings through the proverbial windshield. Revenue increased 18.1% sequentially and 52.1% over the same quarter last year. Net income spurted 46.8% sequentially and 174% over last year's fourth quarter. Revenue and income murdered even the highest analyst estimate.
The fervid consumer-electronic device market was to blame, something we conveyed in our last 2 reports on cell phone king Motorola (MOT), who ubiquitous razR phone carries bluetooth chips made by Broadcom.
CNBC's Kudlow and Company had Broadcom's CEO Scott A. McGregor on the program this evening -- when asked if Broadcom was essentially a "one trick pony," McGregor replied with a resounding No.
Broadcom is well positioned in a plethora of fast growing categories, like cable modems, digital televisions, video recorders, and digital-cable boxes.
As long as Moto and Apple (AAPL), another Broadcom customer, keep on knocking the ball out of the park -- which we think they will until at least the end of Q2 -- Broadcom will have the wind at its back.
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