Broadcom, a leading semiconductor solutions provider, recently announced its fiscal third-quarter results, revealing a performance that surpassed expectations. The results, buoyed by a strong demand for artificial intelligence semiconductor solutions and the strategic acquisition of VMware, reflect the company's resilience in a fluctuating market.
During the quarter ending on August 4, Broadcom reported adjusted earnings of $1.24 per share. This marks an increase from $1.05 per share reported during the same period last year, comfortably exceeding the consensus estimate of $1.21 as polled by Capital IQ. Furthermore, the company's revenue soared by an impressive 47%, reaching $13.07 billion, which also surpassed Wall Street expectations of $12.96 billion. Breaking down the revenue figures, the semiconductor solutions segment saw a year-over-year increase of 5%, generating $7.27 billion.
In sharp contrast, the infrastructure software division experienced remarkable growth, tripling its revenue to $5.8 billion. These results highlight the significant impact of both AI semiconductor solutions and the integration of VMware's multi-cloud services. In a statement, Broadcom's Chief Executive Officer, Hock Tan, attributed the company's strong performance to the ongoing demand for cutting-edge AI technologies.
"Our results exemplify the strength of AI semiconductor solutions and the value added by VMware since its acquisition last November," Tan stated. Excluding VMware's contributions, the consolidated revenue still grew by 4% year-over-year, as explained by Chief Financial Officer Kirsten Spears. Looking ahead to the fiscal fourth quarter, Broadcom projects total revenue to reach approximately $14 billion, slightly below the market's estimate of $14.04 billion.
Despite the optimistic outlook, Broadcom’s stock saw a dip of 4.1% in after-hours trading, closing at $146.55, reflecting a change of -6.27, or a 4.10% decline. Additionally, Tan offered insights into future expectations, suggesting, "We anticipate revenue from AI to reach $12 billion for the fiscal year 2024, bolstered by advancements in Ethernet networking and custom accelerators designed for AI data centers." These industry dynamics signal a proactive approach by Broadcom to harness the growing momentum of AI technologies, positioning itself for sustained growth..