Chip Maker Avago's Revenue Rises 37%

Avago Technologies Ltd. said revenue rose 37% in its latest quarter, led by the chip maker's wireless communications and enterprise storage segments.

For the quarter ended Aug. 2, revenue increased to $1.74 billion from $1.27 billion a year earlier. Net revenue from continuing operations rose 36% to $1.75 billion, compared with expectations for revenue of $1.715 billion to 1.765 billion.

Wireless communications segment revenue soared 69% and enterprise storage revenue climbed 46%. Earlier this year, Avago acquired networking company Emulex Corp. for $606 million in a deal it expected would fit well with its enterprise storage portfolio.

In prepared remarks Wednesday, Chief Executive Hock Tan said the company expects sequential growth. "Led by strong seasonal growth in our wireless segment, and stable performance from our enterprise storage, wired and industrial segments, we expect solid sequential revenue growth to sustain in the fourth quarter," Mr. Tan said.

For the quarter ending Nov. 1, Avago forecast revenue of $1.825 billion to $1.875 billion, while analysts polled by Thomson Reuters expected revenue of $1.86 billion.

The company in May agreed to acquire rival wireless-chip maker Broadcom Corp. in a cash-and-stock deal initially valued at $37 billion. The transaction would meld two companies with complementary sales of communications chips, including processors that handle different chores in smartphones from Apple Inc. and Samsung Electronics Co.

After the deal closes, which is expected to occur by early next year, the company will adopt the name Broadcom Ltd. and continue to be led by Avago's Mr. Tan.

Overall, Avago reported a profit of $240 million, or 84 cents a share, compared with a year-earlier loss of $164 million, or 65 cents a share. Excluding acquisition and restructuring-related impacts and other items, per-share earnings from continuing operations rose to $2.24 from $1.26.

Analysts polled by Thomson Reuters expected per-share profit of $2.14.

(By Tess Stynes)