Shares of Broadcom Corp. (NASDAQ:BRCM) jumped more than 4% after it announced better-than-expected third-quarter results and gave optimistic fourth-quarter guidance on Tuesday after the market closed.
The chip-maker forecast fourth-quarter revenue between $1.8 billion to $1.9 billion, beating the Street’s expectations for revenue of $1.75 million.
Net income improved to $327 million, or 60 cents a share, compared with year-ago earnings of $85 million, or 16 cents a share. On an adjusted basis, earnings rose to 74 cents a share, up from 40 cents in the third quarter of last year.
Revenue rose 44% during the quarter to $1.81 billion, up from $1.25 billion, one year ago.
The results topped expectations, as analysts polled by Thomson Reuters had predicted earnings of 71 cents a share, on revenue of $1.75 billion.
Gross margin widened in the third quarter to 51.7%, up from 50.9%, in the third quarter of last year.
Broadcom president and CEO Scott McGregor said he was pleased with the company’s record sales in each of its segments.
“These achievements are due to solid growth in our wired and wireless communication businesses, powerfully engineered products and Broadcom's continued commitment to financial discipline," said McGregor, in a statement. "Looking ahead, we believe that consumer demand for connectivity will continue to drive demand for our communication semiconductors, which should enable Broadcom to deliver solid revenue growth and sustained profitability in the fourth quarter."
In a separate release, the company announced it would acquire Percello Ltd. a processor-maker for Femtocells, for approximately $86 million.
Shares of Broadcom fell 29 cents in the regular session on Tuesday, closing at $37.22 a share. The stock was up $1.64, or 4.4%, in electronic trading after the market closed.