Broadcom Q3 Earnings Beat Estimates, But Stock Falls on Disappointing Outlook
Broadcom Inc. (NASDAQ:AVGO) reported stronger-than-expected earnings for its fiscal third quarter, driven by significant growth in AI-related revenue. The company posted an adjusted earnings per share (EPS) of $1.24, surpassing Wall Street's forecast, and reported a 47% year-over-year increase in revenue, reaching $13.07 billion. Despite these positive results, the company's stock dropped approximately 5% due to concerns over the future growth rate of its AI revenue.
The semiconductor and software giant provided forward guidance for the current quarter, estimating revenue of $14 billion, slightly below the $14.13 billion analysts had anticipated. This forecast contributed to the stock's decline, which fell 4.8% to close at $152.82. Broadcom's CEO, Hock Tan, highlighted the critical role of AI in the company's financial performance, predicting that AI-related revenue would reach $12 billion in fiscal year 2024. However, some investors expressed disappointment over the slower-than-expected ramp-up in AI revenue.
In addition to its earnings report, Broadcom's Board of Directors approved a quarterly cash dividend of $0.53 per share, to be paid to stockholders of record on September 30. The company also declared a dividend of $3,000 per share for the remainder of the year. The company's stock performance was further influenced by broader market conditions, including the upcoming US jobs report, which is expected to impact market sentiment.
