Earnings Preview: Broadcom Corporation (BRCM) – Benefit from Strong iPhone Sales
By:NewsyStocks   Tuesday, January 31, 2022 9:35 AM

Semiconductor manufacturer, Broadcom is scheduled to release its fourth quarter results on Tuesday, January 31. The company looks set to benefit handsomely as a supplier to Apple after the tech giant reported strong sales growth for devices.

The company is expected to post earnings of $0.64 per share indicating a year-over-year growth in excess of 10 percent.

Broadcom increased their revenue guidance for the fourth quarter to the high end of the previous range to $1.8 billion.

Given the surge in sales in Apple products, demand for Broadcom's products should be good in the first quarter of 2012 and heading into the year. Furthermore, given the upcoming release of the iPad 3 and low inventory of Apple devices, the company should see a stronger order book. The company managed to deliver record quarterly revenues in Q3 of $1.96 billion, an increase of 8.4 percent year-over-year.

Non GAAP net income for the quarter was $476 million, or $0.82 per share compared with $456 million, or $.80 per share in the corresponding year-ago period.

Credit Suisse believes that relative weakness in the Networking/Infrastructure segment which contributes 20 percent of revenue should be offset by incremental gains to its Mobile & Wireless segment.

Nomura Securities suggests that low Apple inventory along with the iPad 3 should mean a better-than-seasonal Q1 for mobile and wireless.

Our Take

Given Broadcom's relation with Apple, each device sold by Apple currently has close to $6 worth of Broadcom components in them. In its last quarter, Apple sold north of 37 million iPhones and 15 million iPads which translate to a healthy revenue stream for the company. The company also enjoys good potential for revenue growth though its Enterprise segment in 2012.