Broadcom Beats Estimates With a Record Quarter

Communications chip maker Broadcom Corp. reported record sales along with quarterly earnings that beat Wall Street estimates Tuesday amid a spate of good results posted by Southland technology companies.

The positive news sent stock prices up as companies, including Vitesse Semiconductor Corp. and QLogic Corp., generally met or exceeded expectations, something analysts weren’t sure about last fall amid forecasts of possible slowdowns.

Broadcom stock gained $4.63 to close at $133.44 a share before it released its earnings. The Irvine firm’s results and its statements that it would meet estimates in the coming quarters sent the stock as high as $142.50 in after-hours trading.

“The market is interpreting the news that companies have put out positively,” said analyst Arun Veerappan of the investment bank Robertson Stephens. “They are anticipating that the second half of the year will be strong, but I don’t think anybody is reporting phenomenally good news for the March quarter.”

Broadcom reported a fourth-quarter profit of $86.7 million, or 32 cents a share--a penny higher than the average estimate of analysts surveyed by First Call/Thomson Financial. The income--before acquisition and stock-option costs--more than doubled from the $32 million, or 13 cents, earned in the year-ago period.

Quarterly sales more than doubled to a record $376.1 million from $162 million.

Broadcom has been the nation’s fastest-growing chip maker, and its annual results gave its chief executive, Henry T. Nicholas III, reason to cheer.

“During the year, Broadcom reached the $1-billion revenue level, a significant milestone that made us the fastest-growing U.S. semiconductor company to date, a testament to both the company’s ability to execute well in multiple broadband markets and the tremendous growth of those markets,” Nicholas said.

Broadcom’s annual income, excluding its acquisition charges and other costs, rose to $271.4 million, or $1.04 a share, beating analysts’ average estimate of $1.01 a share. Including the one-time charges, it lost $693.4 million, or $3.15 a share, far from annual net income of $72.5 million, or 31 cents a share, the prior year. Annual revenue more than doubled to a record $1.1 billion from $521.2 million.

Vitesse Semiconductor in Camarillo, which makes chips for fiber-optic equipment, also reported increased quarterly earnings this week. The company said its fiscal first-quarter income was $47.6 million, or 25 cents per share, not including acquisitions and stock compensation charges. That was more than double the earnings of $20.4 million, or 11 cents a share, for its previous year’s first quarter. Revenue rose 85% to $165.1 million from $89.3 million.

Storage network infrastructure company QLogic in Aliso Viejo also exceeded Wall Street expectations by 2 cents by posting earnings at $26.6 million, or 28 cents a share, for its fiscal third quarter, ended Dec. 31. It earned $14.4 million, or 15 cents, a year ago.

Broadcom and other companies in its sector saw their stock prices tumble in November after warnings of fewer orders from Cisco Systems Inc., which had been Broadcom’s second-largest customer. But Broadcom was able to weather the quarter, in part, because its business with 3Com Corp. doubled over the previous quarter, Veerappan said. Broadcom’s revenue from Cisco was down 17% from last quarter.

Bill Ruehle, Broadcom’s chief financial officer, said the company expects to continue its sales growth, increasing 22% to 23% this quarter over the fourth quarter, partly because of its acquisition of ServerWorks, completed last week. Broadcom expects to post earnings per share of about 33 cents this quarter, not including acquisitions and other costs, Ruehle said.

With the one-time charges and costs figured in, mainly from six acquisitions completed in the last quarter, Broadcom lost $768.6 million, or $3.28 a share, for the fourth quarter, compared with net income of $33 million, or 13 cents, a year ago.

For Vitesse, net income for its first quarter, ended Dec. 31, rose 41% to $28.1 million, or 15 cents a share, from $19.9 million, or 11 cents, the previous year. QLogic’s net income for its third quarter was $25.2 million, or 26 cents a share, compared with $14.4 million, or 15 cents a share, for the prior year’s third quarter.

Vitesse shares rose $8.63, or 13%, Tuesday to $75.88. QLogic shares rose $10.63 per share, or 12%, to close at $97.69, both on Nasdaq.

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