Summary
Broadcom Inc. reported strong financial performance for the fiscal quarter ending August 4, 2018, with net revenue increasing to $5,063 million, a 13% rise year-over-year. This growth was primarily driven by contributions from the Brocade FC SAN business and increased demand in the wired infrastructure segment, particularly for networking ASIC products. The company also saw a significant improvement in operating income, which more than doubled to $1,339 million, reflecting enhanced gross margins and effective cost management. Financially, Broadcom demonstrated robust cash flow generation, with $6,245 million in cash from operations for the first three quarters. The company also returned significant capital to shareholders through $2,275 million in dividends and distributions and $5,725 million in share repurchases during the period. A notable event was the pending acquisition of CA, Inc. for approximately $18.9 billion, which Broadcom intends to finance with cash on hand and new debt. The company also benefited from a significant income tax benefit of $8,391 million primarily related to the U.S. Tax Cuts and Jobs Act and its Redomiciliation Transaction.
Financial Highlights
57 data points| Revenue | $5.06B |
| Cost of Revenue | $2.44B |
| Gross Profit | $2.62B |
| R&D Expenses | $959.00M |
| SG&A Expenses | $234.00M |
| Operating Expenses | $1.28B |
| Operating Income | $1.34B |
| Interest Expense | $149.00M |
| Net Income | $1.20B |
| EPS (Basic) | $0.28 |
| EPS (Diluted) | $0.27 |
| Shares Outstanding (Basic) | 4.30B |
| Shares Outstanding (Diluted) | 4.41B |
Key Highlights
- 1Net revenue for the fiscal quarter ending August 4, 2018, reached $5,063 million, a 13% increase compared to the same period last year, driven by growth in enterprise storage (Brocade acquisition) and wired infrastructure.
- 2Operating income more than doubled year-over-year to $1,339 million, driven by higher net revenue and improved gross margin, which increased to 52% from 48%.
- 3The company generated strong operating cash flow of $6,245 million for the first three quarters of fiscal year 2018.
- 4Broadcom returned substantial capital to shareholders, repurchasing $5,725 million in common stock and paying $2,275 million in dividends and distributions during the first three quarters.
- 5A significant income tax benefit of $8,391 million was recorded for the first three quarters, primarily due to provisional benefits from the U.S. Tax Cuts and Jobs Act and the Redomiciliation Transaction.
- 6Broadcom announced a definitive agreement to acquire CA, Inc. for approximately $18.9 billion, expected to be financed by cash on hand and $18 billion in new debt financing.