Broadcom Q3 Profit Slumps on Increased R&D Spending
Semiconductor firm, Broadcom Corp. has reported a 75% drop in Q3 profits after the company increased spending on mobile phone chip R&D. Spending on R&D rose by 29% last quarter to US$352.3 million, outpacing sales growth. Net income (GAAP) for the third quarter of 2007 was US$27.8 million, compared with GAAP net income of $110.2 million for the third quarter of 2006.
Broadcom has reported that its net revenue for the third quarter of 2007 was US$950 million, an increase of 5.2% compared with the US$902.6 million reported for the third quarter of 2006.
"New product cycles enabled Broadcom to attain record revenue and generate strong operating cash flow in the third quarter," said Scott A. McGregor, Broadcom's President and Chief Executive Officer. "Our record revenue was driven by strength in the Bluetooth, wireless LAN and digital TV markets. Broadcom continues to be a product cycle-driven company with a strong track record of successfully entering new markets. Looking forward, in the fourth quarter and in 2008 we will continue to invest aggressively in research and development of products for the very large cellular handset market, as well as new product offerings to address more of our existing customers' needs."
In a conference call, McGregor said he didn't expect "substantial" revenue from its increased mobile phone research until 2009.
Posted to the site on 24th October 2007
