Drop in Costs Lifts Broadcom Profit

Broadcom Corp., which makes microchips for consumer electronics and computer networks, said Thursday that first-quarter profit rose 74% as costs fell. Sales declined for the first time in 12 quarters.

Net income rose to $69.2 million, or 19 cents a share, from $39.9 million, or 12 cents, a year earlier, Irvine-based Broadcom said. Sales fell 4% to $550.3 million. Profit, excluding one-time items, was 23 cents. Profit on that basis and sales beat the average of estimates by analysts surveyed by Thomson First Call.

A drop in costs related to stock-based compensation contributed to the profit gain. That helped the company weather the drop in sales resulting from a decision by Intel Corp., the world’s largest computer chip maker, to make its own version of products formerly bought from Broadcom.

“They did well across the board last quarter,” said David Wu, an analyst at Global Crown Capital in San Francisco. “The numbers look good.”

Broadcom had been expected to report profit excluding costs of 22 cents a share, the average estimate of 23 analysts surveyed by Thomson, on sales of $541.7 million.

Broadcom forecast second-quarter sales of $572 million to $577 million, topping the $569.9 million expected by 19 analysts. Broadcom typically doesn’t give a profit forecast.

Shares of Broadcom rose 72 cents to $30.17 in extended trading after the results were released. The stock had climbed $1.33 to $29.45 during Nasdaq’s regular session.