Net profit fell 40% year-on-year! Broadcom's third-quarter revenue of $5.5 billion

Beijing time on September 13 morning news, Broadcom today released the third quarter financial results for the 2019 fiscal year. According to the report, Broadcom’s third-quarter net revenue was $5.515 billion, a 9% increase from the $5,033.3 million in the same period last year, which was essentially the same as the previous quarter’s $5,517 million; net profit was $715 million, This year's $1.196 billion was down 40% compared to $691 million in the previous quarter. Broadcom's third-quarter adjusted earnings per share exceeded Wall Street analysts' expectations, but third-quarter revenue and full-year revenue outlook were less than expected, resulting in its after-hours share price falling more than 1%.

In the quarter ended August 4, Broadcom’s net profit was $715 million, and diluted earnings per share were $1.71. In contrast, Broadcom's net profit for the same period last year was 1.196 billion US dollars, diluted earnings per share was 2.71 US dollars; net profit in the previous quarter was 691 million US dollars, diluted earnings per share was 1.64 US dollars.

Excluding certain one-off items (not in accordance with US GAAP), Broadcom’s third-quarter net profit was $2,281 million, and diluted earnings per share were $5.16, exceeding analysts’ expectations. In contrast, Broadcom's net profit for the same period last year was 2.257 billion US dollars, diluted earnings per share was 4.98 US dollars; net profit in the previous quarter was 2.334 billion US dollars, diluted earnings per share was 5.21 US dollars. According to data provided by Yahoo Finance Channel, 25 analysts had expected Broadcom's third-quarter earnings per share to be $5.13.

Broadcom’s third-quarter net revenue was $5.515 billion, a 9% increase from the $5,033.3 million in the same period last year, which was essentially flat compared to $5.517 billion in the previous quarter, slightly below analysts’ expectations. According to data provided by Yahoo Finance Channel, 25 analysts had expected Broadcom's third-quarter revenue to be $5.54 billion.

According to the business unit, Broadcom's semiconductor solutions division's third-quarter revenue was $4.353 billion, accounting for 79% of total net revenue; last quarter was $4.088 billion, accounting for total net revenue. The ratio was 74%; the same period last year was $4.568 billion, accounting for 90% of total net revenue. Broadcom's infrastructure software division's third-quarter revenue was $1.14 billion, accounting for 21% of total net revenue; last quarter was $1.413 billion, accounting for 26% of total net revenue; The same period last year was $492 million, accounting for 10% of total net revenue. Broadcom’s third-quarter intellectual property license revenue was $22 million, compared to $16 million in the previous quarter and $3 million in the same period last year.

Broadcom's third-quarter gross margin was 55.0%, down 330 basis points from the previous quarter's 56.0%, and up 330 basis points from 51.7% in the same period last year. Not in accordance with US GAAP, Broadcom's third-quarter gross margin was 71.0%, down 100 basis points from 72.0% in the previous quarter and 370 basis points from 67.3% in the same period last year.

Broadcom's third-quarter operating profit was $865 million, accounting for 15.7% of total net revenue; last quarter was $970 million, accounting for 17.6% of total net revenue; 13.39 for the same period last year In the case of US$100 million, the proportion of total net revenue was 26.4%.

Broadcom’s third-quarter operating expenses were $2.169 billion, compared to $2.119 billion in the previous quarter and $1.28 billion in the same period last year. Not in accordance with US GAAP, Broadcom’s third-quarter operating expenses were $1.006 billion, compared to $1.022 billion in the previous quarter and $874 million in the same period last year.

Broadcom's third-quarter cash from business operations was $2.419 billion, compared to $2,247 million in the same period last year.

During the quarter, Broadcom repurchased 2.6 million shares at a cost of $736 million, with capital expenditures of $112 million. On July 2, 2019, Broadcom distributed a cash dividend of $2.65 per common share, and the total amount of cash used to pay dividends was $1.057 billion. As of the end of the third quarter, Broadcom held cash and cash equivalents totaling $5.462 billion, compared with $5.328 billion at the end of the previous fiscal quarter.

The Broadcom Board of Directors has approved a quarterly cash dividend of $2.65 per share, which will be paid to registered shareholders as of September 23, 2019, on October 1, 2019.

Broadcom expects net revenue in FY 2019 to reach US$22.5 billion, which is less than analysts' expectations; operating profit will reach 14.75%, operating margin will not reach 52.50% in accordance with US GAAP; net interest expense and other expenses will reach The US$1.3 billion; the income tax reserve ratio will reach -17.75%, and the income tax reserve ratio that is not in accordance with US GAAP will reach 11.00%. According to data provided by Yahoo Finance Channel, 29 analysts had expected Broadcom's revenue in FY 2019 to reach $22.61 billion.

On the same day, Broadcom's share price rose 2.57 US dollars in the Nasdaq regular trading, to close at 300.58 US dollars, or 0.86%. In the after-hours trading that ended at 5:04 pm ET (5:04 am on Friday, Beijing time), Broadcom shares fell 4.33 US dollars to 296.25 US dollars, or 1.44%. In the past 52 weeks, Broadcom's highest price was $323.20 and the lowest price was $208.23.