Broadcom Corp Earnings: Four Straight Quarters of Profit Drops, but Beats Estimates

S&P 500 (NYSE:SPY) component Broadcom Corporation (NASDAQ:BRCM) posted lower net income in the fourth quarter compared with a year-earlier period. Broadcom manufactures semiconductors for wired and wireless communications.

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Broadcom Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the semiconductor company fell to $254 million (45 cents per share) vs. $266.2 million (47 cents per share) a year earlier. This is a decline of 4.6% from the year earlier quarter.

Revenue: Fell 6.5% to $1.82 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: BRCM reported adjusted net income of 68 cents per share. By that measure, the company beat the mean estimate of 40 cents per share. Analysts were expecting revenue of $1.8 billion.

Quoting Management: “Broadcom delivered solid results in 2011, as we gained significant market share, secured record design wins across our businesses, and delivered record revenue and cash flow from operations,” said Scott McGregor, Broadcom’s President and Chief Executive Officer. “Looking forward, we will remain focused on product innovation and engineering execution that position us to grow faster than the industry.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 44.9%.

The company has now seen net income fall in each of the last three quarters. In the third quarter, net income fell 17.5% from the year earlier, while the figure fell 37.1% in the second quarter.

The company topped expectations last quarter after falling short of forecasts in the third quarter with net income of 48 cents versus a mean estimate of net income of 54 cents per share.

The company’s cost of sales fell 6.5% from a year earlier to $894 million. Last quarter, cost of sales was 49.1% of revenue versus 49.1% a year earlier.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 26 cents. The average estimate for the fiscal year has seen a bump from $1.55 per share sixty days ago to $1.59.

Competitors to Watch: QUALCOMM, Inc. (NASDAQ:QCOM), Texas Instruments Inc. (NYSE:TXN), Analog Devices, Inc. (NYSE:ADI), NVIDIA Corporation (NASDAQ:NVDA), Marvell Tech. Group Ltd. (NASDAQ:MRVL), Intel Corporation (NASDAQ:INTC), Entropic Communications, Inc. (NASDAQ:ENTR), PMC-Sierra, Inc. (NASDAQ:PMCS) and Zoran Corporation (NASDAQ:ZRAN).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com