Why Avago Technologies Ltd. Stock Popped Today

What:Shares ofAvago Technologies Ltd. rose as much as 11.1% early Thursday after the communications semiconductor specialist reported better-than-expected fiscal fourth-quarter 2015 results.

So what:Adjusted quarterly revenue climbed 15.1% year over year to $1.85 billion, and translated to a 24.6% increase in adjusted net income from continuing operations to $737 million, or $2.51 per diluted share. Analysts, on average, were expecting roughly the same revenue but significantly lower adjusted net income of $2.38 per share.

"We finished fiscal 2015 on a very strong note," added Avago Technologies CEO Hock Tan, "delivering record levels of revenue and profitability in our recently completed fourth quarter. The LSI acquisition and the synergies we have been able to realize through its integration, as well as strong year on year growth in wireless revenues were significant contributors to our 2015 results."

Tan also voiced excitement for the possibility to grow earnings in the coming year after Avago completes its pending acquisition of Broadcom , shares of which also rose 4% early Thursday. Last month, Avago shareholders overwhelmingly voted in favor of the transaction, which was first announced this past May. Going forward, the purchase still requires regulatory approvals from the European Commission and antitrust authorities in China and South Korea. Avago expects to receive these approvals sometime between the end of this calendar year and early 2016.

Now what:For the current quarter, Avago expects adjusted net revenue of $1.78 billion, plus or minus $25 million. Analysts, for their part, were modeling fiscal first-quarter 2016 revenue slightly above the high end of that range at $1.82 billion.

Nonetheless, I think investors are right to be excited by Avago's execution as it begins to realize the fruits of its past acquisitions, while at the same time making steady progress toward closing its purchase of Broadcom. Assuming everything goes well with Avago's pending approvals, I won't be surprised if the stock continues trending higher from here.

The article Why Avago Technologies Ltd. Stock Popped Today originally appeared on Fool.com.

Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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