Broadcom
AVGO
is set to report third-quarter fiscal 2022 results on Sep 2.
For the quarter, Broadcom expects revenues of $6.75 billion. The Zacks Consensus Estimate for revenues currently stands at $6.76 billion, suggesting growth of 16.1% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for earnings has remained steady at $6.88 per share over the past 30 days, and indicates 27.4% growth from the figure reported in the year-ago quarter.
This Zacks Rank #3 (Hold) company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average earnings surprise being 2.1%. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Let’s see how things have shaped up for Broadcom prior to this announcement:
Factors to Consider
Broadcom’s top-line growth is expected to have benefited from strong demand for its PON fiber in the broadband market, driven by the pandemic-induced work-from-home and online-learning waves. Continued solid demand for DOCSIS 3.1 cable modems has been a key catalyst.
Robust adoption of Wi-Fi 6 and Wi-Fi 6E for access gateways, courtesy of solid demand from homes, enterprises, telcos and other service providers, is expected to have contributed to revenue growth across the broadband end market in the fiscal third quarter.
Acceleration in 5G deployment, production ramp up and increase in radio frequency content are expected to have driven top-line growth.
For fiscal third quarter, Broadband revenues are expected to have grown in double digits on a year-over-year basis. Networking revenues are expected to have grown in low double digits, thanks to improving demand from enterprises.
However, server storage connectivity revenues are expected to be down high single digit on a year-over-year basis despite benefits from the launch of
Intel
’s
INTC
Ice Lake and
Advanced Micro Devices
‘
AMD
Milan processors.
The Zacks Consensus Estimate for the Semiconductor solutions segment’s revenues for the fiscal third quarter is pegged at $5.06 billion, suggesting growth of 20% from the figure reported in the year-ago quarter.
Broadcom’s fiscal third-quarter performance is likely to reflect synergies from the buyouts of CA and Symantec’s enterprise security business. The pandemic-induced work-from-home trend may have favored the adoption of cloud-based infrastructure software solutions, which is likely to get reflected in the to-be-reported quarter’s top line.
Broadcom’s collaboration with
Alphabet
’s
GOOGL
Google Cloud is also noteworthy in this regard.
These factors are anticipated to have aided Broadcom’s Infrastructure software revenues. For the fiscal third quarter, revenues from the Infrastructure software segment are expected to be up “at or better than mid-single-digit percentage” on a year-over-year basis.
The Zacks Consensus Estimate for the Infrastructure Software segment revenues for fiscal third quarter is pegged at $1.70 billion, indicating year-over-year growth of 6.1%.
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