Broadcom (NASDAQ:BRCM) announced a sharp decline in first-quarter profit on Tuesday but still managed to beat Wall Street’s expectations.
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Profit sank for the fourth consecutive quarter as moderately improved sales failed to outpace higher expenses for the chipmaker, which provides chips for Apple’s (NASDAQ:AAPL) new iPad and third-generation Apple TV, as well as Samsung’s Galaxy S II and Nexus smartphones and its Galaxy Tab.
Broadcom reported net income of $88 million, or 15 cents a share, for the January through March quarter, compared with $228 million, or 42 cents a share, in the year-ago period. Though iPad sales were strong, Nokia (NYSE:NOK) and other handset makers for whom Broadcom provides chips experienced weaker sales.
Excluding one-time items, Broadcom earned 65 cents per share, beating the average estimate of analysts polled by Thomson Reuters. Revenue for the quarter ended March 31 was $1.83 billion, up slightly from $1.82 billion a year earlier, topping the Street’s expectations as well as its own.
“Broadcom performed well in the first quarter, with revenue near the high end of the guided range and better-than-expected underlying profitability,” Broadcom CEO Scott McGregor said in a statement.
Earnings were also boosted by the closure of its $3.7 billion acquisition of NetLogic Microsystems, which expands its footprint in network infrastructure, as well as the first shipments of 5G WiFi.
Broadcom is projecting second-quarter sales between $1.9 billion and $2 billion. Analysts are expecting $1.97 billion in sales for the quarter ending June 30.
Despite the earnings beat and a decent outlook, investors are reacting negatively to the results, with shares falling 1.24 percent in after-hours trading.