Broadcom Profits Down by 90%

Semiconductor firm, Broadcom has recorded a 13.4% drop in Q2 revenues of US$1.040 billion compared to the previous year, although this was up 21.9% compared to Q1 of 2009. Net income plunged by 90% to US$13.4 million, compared to US$134.8 million a year ago.

Broadcom recorded a US$65.3 million gain on settlement and US$67.3 million of licensing revenue following the settlement of a patent dispute with Qualcomm. Broadcom will earn a US$891 million over four years from the settlement.

"Despite the continued global economic uncertainty, Broadcom's results for the second quarter reflected a return to a more stable ordering pattern and the ramp of new products from our end customers," said Scott A. McGregor, Broadcom's President and Chief Executive Officer. "In the second quarter, Broadcom generated strong sequential revenue growth, with product revenue near the top end of the range provided in April. We are pleased that research and development and selling, general and administrative expenses once again increased less than anticipated from the first quarter of 2009, reflecting our continued focus on maintaining solid financial discipline. In addition, we generated strong cash flow in excess of $325 million from operations."

"Our operating strategy for 2009 remains focused on managing our business to gain share and generate positive quarterly cash flow from operations. Based upon the customer activity we have experienced to date we anticipate that future revenue growth will be broad based with slightly stronger growth within our mobile and wireless targeted end market, driven by new product ramps and the upcoming holiday season."

The company recently cancelled plans for a hostile takeover of rival firm, Emulex.

Posted to the site on 24th July 2009