After the closing bell yesterday, one of my favorite semiconductor companies released earnings. And when I say “favorite,” you’d better believe I mean it. This company has already brought members in one of my services a better than 285% return! Needless to say, I paid close attention to this company’s earnings announcement last night. In today’s blog, I want to share with you what these results mean for you right now…
Broadcom Ltd. (AVGO) (formerly known as Avago Technologies Ltd.) is a semiconductor company that lights up my quantitative screens. Based in Singapore, Broadcom develops and supplies analog semiconductor devices for over 40,000 customers in wireless communications, wired infrastructure, enterprise storage and industrial markets. While AVGO went public just eight years ago, it has a long history dating back to the 1960s.
Broadcom Limited designs, develops and supplies a range of analog and digital semiconductor connectivity solutions. Its product portfolio comprises broadband access and modems, enterprise and network processors, wireless infrastructure, wireless connectivity, Ethernet communication and switching, as well as set-top box and media processors.
The company’s products are used in various applications, including data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems, as well as displays.
It primarily serves wired infrastructure, wireless communications, enterprise storage and industrial markets in China, the United States and Singapore. The company was formerly known as Avago Technologies Limited and changed its name to Broadcom Limited in February 2016.
Shares of AVGO jumped more than 4% in after-hours trading on Wednesday evening, following the company’s earnings report for its fourth quarter in fiscal year 2017. During the quarter, net revenues rose 17% year-over-year to $4.84 billion, up from $4.14 billion in the same quarter a year ago. The analyst community was expecting $4.83 billion in sales, so Broadcom posted a slight sales surprise.
Net income jumped 35% year-over-year to $636 million, or $1.50 per share, compared with a net loss of $632 million, or a $1.59 per share loss, in the company’s fourth quarter in fiscal year 2016. Adjusted earnings per share surged 32.3% year-over-year to $4.59, beating analyst estimates for $4.52 by 1.6%.
Looking ahead, for the company’s first quarter in fiscal year 2018, Broadcom is expecting revenue ranging between $5.22 billion and $5.37 billion, nicely higher than the current Street estimate of $4.82 billion.
Broadcom also announced that due to strong fiscal 2017 results, it increased its dividend by a massive 72% from the previous quarter. Broadcom declared a quarterly dividend of $1.75 per share. Shareholders of record on December 19 will be paid on December 29. At current prices, AVGO has a 1.6% annual dividend yield.
Add it all up, and it’s no wonder Broadcom maintains a Buy-Rating in my Portfolio Grader tool. I urge you to always run your stocks through this tool. It’s an easy way to make sure you’re on the right track with your portfolio.