(Reuters) – Broadcom Inc (AVGO.O) reported third-quarter profit above analysts’ estimates and the chipmaker forecast current-quarter revenue largely above expectations, driven by strong performance of its enterprise storage business.
A sign to the campus offices of chip maker Broadcom Ltd is shown in Irvine, California, U.S., November 6, 2017. REUTERS/Mike Blake/File Photo
Shares of the company rose 3.7 percent to $224.05 in extended trading.
Revenue from the unit rose 70 percent to $1.25 billion in the quarter ended Aug. 5.
“Datacenter demand is driving strong growth in more than 50 percent of our consolidated revenue,” Chief Executive Officer Hock Tan said in a statement.
Tan, who has transformed Broadcom into a $100 billion behemoth through a series of acquisitions, surprised Wall Street in July with his move to acquire software maker CA Technologies for $19 billion.
The CA deal comes after U.S. President Donald Trump blocked Broadcom’s $117 billion offer to buy Qualcomm Inc (QCOM.O), in what would have been the biggest ever technology deal, on national security grounds.
The San Jose, California-based company forecast current-quarter revenue of about $5.40 billion, plus or minus $75 million. Analysts on average were expecting revenue of $5.35 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to common stock rose to $1.2 billion, or $2.71 per share, in the reported quarter from $481 million, or $1.14 per share, a year earlier.
Excluding items, the company earned $4.98 per share.
Net revenue rose to $5.06 billion from $4.46 billion.
Analysts on average were expecting earnings of $4.83 per share on revenue of $5.07 billion.
Reporting by Sonam Rai and Sayanti Chakraborty in Bengaluru; Editing by Anil D’Silva