Avago sees strong quarter ahead of new iPhone launch
(Reuters) - Avago Technologies Ltd, whose chips are used in Apple Inc's products, forecast strong growth for the current quarter ahead of the launch of the new iPhone.
The company's wireless business is likely to be boosted by the launch of new smartphones by its two largest customers, Chief Executive Hock Tan said in a post-earnings conference call.
Foxconn Technology Group, a contract manufacturer for Apple, accounted for 17 percent of Avago's revenue last year.
Apple is expected to launch its next smartphone at a special event on September 10, according to technology blog AllThingsD.
Avago, whose wireless business accounted for 45 percent of its total revenue last year, also counts Samsung Electronics Co Ltd, LG Electronics Inc and Huawei Technologies Co Ltd among its major customers.
The company, which designs, develops and supplies analog semiconductors, said fourth-quarter revenue is likely to rise by 12 to 15 percent from the third quarter, implying sales of $721.0 million to $740.5 million. Analysts were expecting $696.3 million on average, according to Thomson Reuters I/B/E/S.
Wireless revenue growth would be in the mid teens, company officials said on a conference call.
Avago shares rose 7 percent to $39.00 in extended trading.
Avago, which posted declining sales for the last three quarters, reported third-quarter revenue of $644 million, above analysts' estimates of $623 million.
Net income fell to $142 million, or 56 cents per share, in the quarter from $145 million, or 58 cents per share, a year earlier.
Excluding restructuring charges, acquisition-related costs and other one-time expenses, it earned 67 cents per share, according to Thomson Reuters I/B/E/S. Analysts had expected earnings of 62 cents per share.
(Additional reporting by Lehar Maan in Bangalore; Editing by Sreejiraj Eluvangal)