Broadcom Earnings Approach

S&P 500 (NYSE:SPY) component Broadcom (NASDAQ:BRCM) will unveil its latest earnings on Tuesday, October 23, 2012. Broadcom manufactures semiconductors for wired and wireless communications.

Broadcom Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 56 cents per share, a rise of 16.7% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 54 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 56 cents during the last month. Analysts are projecting profit to rise by 9.8% compared to last year’s $2.02.

Past Earnings Performance: The company’s quarterly results have come in above estimates for the last three quarters. Last quarter, the company booked profit of 52 cents per share versus a mean estimate of net income of 43 cents per share.

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Stock Price Performance: Between July 24, 2012 and October 17, 2012, the stock price rose $3.82 (12.4%), from $30.77 to $34.59. The stock price saw one of its best stretches over the last year between July 24, 2012 and July 31, 2012, when shares rose for six straight days, increasing 10.1% (+$3.11) over that span. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight straight days, dropping 17.7% (-$6.37) over that span.

A Look Back: In the second quarter, profit fell 8.6% to $160 million (28 cents a share) from $175 million (31 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 9.7% to $1.97 billion from $1.8 billion.

Wall St. Revenue Expectations: On average, analysts predict $2.09 billion in revenue this quarter, a rise of 6.6% from the year-ago quarter. Analysts are forecasting total revenue of $8 billion for the year, a rise of 8.3% from last year’s revenue of $7.39 billion.

Key Stats:

On the top line, the company is looking to build on two-straight revenue increases with this earnings announcement. Revenue rose 0.6% in the first quarter before climbing again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.53 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 2.57 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 8.9% to $1.29 billion while assets rose 7.4% to $3.28 billion.

Analyst Ratings: With 32 analysts rating the stock a buy, none rating it a sell and four rating the stock a hold, there are indications of a bullish stance by analysts.

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

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