Investors Are Not Cheering Broadcom Corp (NASDAQ:BRCM)
Broadcom Corp (NASDAQ:BRCM) has announced weak performance in wireless as well as mobile sections and poor future guidance, triggering investor selling. Broadcom proposes revenues $1.92 billion and $2.03 billion, whereas analysts have pegged earnings at $2.13 billion. Besides, the announcement of 1,150 job cuts too has not gone down well with the investors.
Third quarter was challenging
Broadcom Corp (NASDAQ:BRCM) has announced that in the third quarter, the company has earned nearly 55 cents a share, which is much higher than the 38 cents it had earned previous year for the same quarter. Though growth recorded on per year basis recorded 44%, it was largely due to cutting down on costs rather than revenue earning.
Broadcom Corp (NASDAQ:BRCM) did announce that its earnings were higher at 76 cents per share, much higher than the 68 cent analysts had predicted. Overall revenue earning to was higher, reaching $2.15 billion, much higher than $2.13 analysts predicted.
Closing at $26.36, on Wednesday, the stock hovered near its lowest 52w point of $23.25. The highest BRCM has earned is $37.85 across 52 week range. It’s average volumes are 11,176,300 and market capitalization $15.26 billion.
Broadcom has announced that challenges in the market for ‘connectivity combo chips ‘have resulted in poor performance for the third quarter.
Technology lag, results in poor performance for Broadcom
Over the past few years, Broadcom’s core expertise in chip technology has not moved to adopt LTE technology that is the standard on most chips made by competitors such as Qualcomm and others.
The resultant mismatch in technology platform has meant that Broadcom has fallen out the competition and has begun to lose steadily. Core areas of development that investors expect Broadcom to move quickly are in its wireless sector, notching single-digit growth. However, considering that Broadcom remains focused on 3G chips connectivity over the more popular 4G technology, it remains a tough act!