By Noel Randewich
SAN FRANCISCO, April 23 (Reuters) - Broadcom’s first-quarter results beat expectations and the chipmaker said much of its growth this year would come from selling more components to smartphone makers.
Broadcom’s quarterly earnings report pushed the chipmaker’s shares up after hours as company executives said they expect their baseband chips to appear in upcoming handsets.
Broadcom, which sells wireless chips used in Apple’s iPhone as well lower-end devices popular in Asia, posted first-quarter revenue of $2.01 billion, up 9.7 percent from the year-earlier period.
“Over the course of the year, we should see additional customers in our baseband business,” Chief Executive Scott McGregor told analysts on a conference call, of the chips that let cellphones communicate across networks.
Apple on Tuesday reported fiscal second-quarter revenue above expectations, but profit declined for the first time in a decade and CEO Tim Cook acknowledged that Apple’s growth rate had slowed.
With investors concerned Apple’s expansion may be losing steam, shares of Broadcom had fallen about 1 percent so far in 2013, compared to a 12 percent increase in the Philadelphia Semiconductor index.
Like its competitors, Broadcom is trying to diversify its customer base with more sales to manufacturers including Samsung Electronics, Apple’s main rival in smartphones and tablets.
Broadcom’s chips integrating wifi and Bluetooth technology are used in Apple’s iPhone and other top-tier smartphones and tablets.
The company makes 3G baseband chips used in less expensive smartphones sold in Asia and other emerging markets, and it plans to launch high-speed 4G baseband chips compatible with more advanced networks.
“Their strategy has been to get a foothold at a major supplier and work their way up,” said Kevin Cassidy, an analyst at Stifel Nicolaus. “Now they’re expanding their footprint.”
Broadcom said revenue in the second quarter would be $2.10 billion, plus or minus 4 percent.
Analysts, on average, had expected first-quarter revenue of $1.913 billion and second-quarter revenue of $2.050 billion, according to Thomson Reuters I/B/E/S.
Broadcom reported a net profit of $191 million, or 33 cents per share, compared with a net profit of $88 million, or 15 cents per share, in the year-ago quarter. Adjusted earnings per share were 65 cents, beating the 56 cents expected by analysts.
Shares of Broadcom rose 4.76 percent in extended trade after closing up 1.17 percent at $32.98.