Broadcom Misses Fiscal Second Quarter Revenue Forecast

Shares of Broadcom (AVGO) slumped early on Friday after the semiconductor manufacturer reported fiscal second quarter adjusted earnings that topped the market forecast but revenue missed analysts’ expectations.

Net revenue rose by 10% to $5.52 billion during the three months that ended May 5, from $5.01 billion a year earlier, the San Jose, California-based firm said in its earnings statement after the market closed on Thursday. That result, however, lagged the $5.69 billion average analyst estimate compiled by Capital IQ.

Adjusted earnings per share climbed to $5.21, from $4.88 a year earlier, beating the Street’s $5.18 forecast, even as operating expenses surged by almost 57%.

Looking ahead to the full financial year, the company lowered its sales guidance to $22.5 billion from a previous estimate of $24.5 billion, which was set out after the end of the fiscal first quarter. The revenue outlook missed the Street’s views for a turnover of $24.3 billion.

“We currently see a broad-based slowdown in the demand environment, which we believe is driven by continued geopolitical uncertainties, as well as the effects of export restrictions on one of our largest customers,” Chief Executive Officer Hock Tan said in the statement. “As a result, our customers are actively reducing their inventory levels, and we are taking a conservative stance for the rest of the year.”

Also on Thursday, the company, which remains “focused” on completing a total of $8 billion of share repurchases and eliminations in fiscal 2019, said it maintained its quarterly cash dividend at $2.65 per share.

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