Broadcom CEO sees ‘sustaining’ demand from telecom and cloud providers, with enterprise sales picking up in 2022

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Broadcom Inc. shares ticked down successful the extended league Thursday aft the spot and bundle institution reported quarterly results and an outlook that cleared Wall Street estimates, and said it sees beardown request continuing from telecoms and cloud-providers.

Broadcom  AVGO, -0.26%  shares fluctuated betwixt gains and losses aft hours, and were past down 0.6%, pursuing a 0.3% diminution successful the regular league to adjacent astatine $491.90.

On the telephone with analysts, Hock Tan, Broadcom president and main executive, said spot request from telecoms and cloud-service providers was “running well, rather hard, and it looks similar they are sustaining.”

Broadcom forecast gross of astir $7.35 cardinal for the fiscal 4th quarter, portion analysts had estimated gross of $7.23 billion.

“They look to beryllium sustaining wherever we are close now,” Tan said. “And regarding enterprise, it’s beauteous overmuch what we had indicated earlier and proceed to see, which is simply a continuing trajectory of improving demand, spending and demand, and we spot that continuing to amended and turn adjacent — this coming quarter, Q4, and beyond.”

“In fact, I would accidental that the motor for maturation for our semiconductor concern successful 2022 volition apt beryllium endeavor spending,” Hock told analysts.

Concerning fab capacity, however, Tan said Broadcom volition get by but indicated it could beryllium better. Broadcom uses third-party fabs similar Taiwan Semiconductor Manufacturing Co. TSM, +0.27%, which recently said it was hiking its prices.

“As acold arsenic our capableness for 2022, I deliberation we person gotten a beauteous bully proviso availability lineup for 2022 and we consciousness beauteous OK astir that,” Tan said. “I wouldn’t accidental great, but successful this environment, each things considered, we’re feeling rather good.”

The institution reported fiscal third-quarter nett income of $1.88 billion, oregon $4.20 a share, compared with $688 million, oregon $1.45 a share, successful the year-ago period. Adjusted earnings, which exclude stock-based compensation and different items, were $6.96 a share, compared with $5.40 a stock successful the year-ago quarter.

Revenue roseate to $6.78 cardinal from $5.82 cardinal successful the year-ago quarter. Analysts surveyed by FactSet had expected net of $6.88 a stock connected gross of $6.76 billion, based connected Broadcom’s forecast gross of astir $6.75 billion.

The institution reported a 19% summation successful spot income to $5.02 cardinal from the year-ago period, and a 10% emergence successful infrastructure bundle income to $1.76 billion. Analysts had forecast spot income of $5.06 cardinal and infrastructure bundle income of $1.67 billion.

Over the past 12 months, shares of Broadcom person gained 31%. In comparison, some the S&P 500 index  SPX, +0.28%  and the tech-heavy Nasdaq Composite Index  COMP, +0.14%  have precocious 27%, portion the PHLX Semiconductor Index  SOX, +0.33%  has gained 44% implicit that time.

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