Avago forecasts strong third quarter revenue on smartphone demand
(Reuters) - Chipmaker Avago Technologies Ltd (AVGO.O), which counts Apple Inc (AAPL.O) among its customers, forecast current-quarter revenue largely above expectations, citing revival of demand from a large smartphone customer.
The company, which designs, develops and supplies analog semiconductors, said revenue is likely to rise by 6 to 9 percent from that of the second quarter, implying sales of $595.7 million to $612.6 million.
Analysts on average were expecting third-quarter revenue of $598.1 million, according to Thomson Reuters I/B/E/S.
Avago's sales have fallen for the last two quarters compared to their preceding quarters. Apple has been cutting orders to suppliers to balance excess inventory as its iPhone 5 garnered little enthusiasm.
"We believe that the initial ramp of a product transition at a large smartphone OEM, a recovery in enterprise networking spending, as well as a continued, gradual uptick in industrial end market demand could drive a sequential growth," Avago's Chief Executive Hock Tan said in a statement.
Avago's second-quarter results beat analysts' estimates as strong sales in its industrial business segment offset tepid demand for wireless chips from smartphone customers such as Apple.
"... Revenue headwind was partially offset by the launch of the Samsung Galaxy S-4 platform as well as certain other OEMs that ramped 4G LTE Smartphones during the quarter," Tan said on a conference call.
The company's net income fell to $113 million, or 45 cents per share, in the second quarter, from $134 million, or 54 cents per share, a year earlier.
Revenue fell 3 percent to $562 million.
Avago shares were up 5 percent at $36.10 in extended trading. They had closed at $34.43 on the Nasdaq on Wednesday.
(Reporting By Lehar Maan in Bangalore; Editing by Sreejiraj Eluvangal)
- Special Report: Thailand secretly supplies Myanmar refugees to trafficking rings |
- UPDATE 2-China bars banks from bitcoin transactions
- The 10 Most Corrupt and Least Corrupt Countries in the World
- Obama says he's not allowed iPhone for 'security reasons'
- China central bank warns banks against use of bitcoin