NEW YORK (Reuters) - Broadcom Corp on Tuesday forecast a decline in revenue for the fourth quarter due to challenging market conditions including weakness in its infrastructure chip business.
While Broadcom’s third-quarter revenue was better than Wall Street expected, its weak outlook was not a big surprise as chip makers such as Texas Instruments and Intel Corp have posted weak results due to softness in the global economy.
Broadcom, a supplier of chips used in everything from cellphones to TV set-top boxes, is often cushioned by the diversity of its customer base in different industries and its agreements to supply chips for Apple Inc’s hugely popular iPhones.
However it expects fourth-quarter 2012 revenue would drop to a range of $1.95 billion to $2.1 billion, below Wall Street expectations for $2.11 billion, according to Thomson Reuters I/B/E/S.
Company executives said during a call with analysts that the decline is expected to stem primarily from weak demand for chips used in computer data center infrastructure and communications network equipment.
Shareholders shrugged off the news as the company slightly beat Wall Street expectations for third quarter revenue and the current quarter view was not as bad as some had feared.
“It’s a matter of investors already having factored in a very poor macro backdrop,” said Williams Financial analyst Cody Acree.
Broadcom posted a profit of $220 million, or 38 cents per share, compared with $270 million, or 48 cents per share, in the year-ago quarter.
Revenue rose to $2.13 billion from $1.96 billion, compared with analysts’ expectations for $2.09 billion, according to Thomson Reuters I/B/E/S.
Broadcom said this was its first quarter with revenue above $2 billion, and its first quarter with more than $1 billion of revenue from wireless chips.
Its shares rose 14 cents in after-hours trading to $33.50 after closing down 6 cents at $33.36 in the regular Nasdaq session.
Reporting by Sinead Carew; Editing by Gary Hill, Leslie Gevirtz and Tim Dobbyn