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Broadcom Limited

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Broadcom reported solid third-quarter fiscal 2016 results with healthy sequential improvements in revenues and earnings on the back of robust organic growth, while adjusted earnings of $2.47 per share comfortably exceeded the Zacks Consensus Estimate of $2.29. Synergistic benefits from the merger with Avago are likely to increase future profitability through economies of scale and mutual sharing of manufacturing expertise and R&D costs. In addition, Broadcom maintains an efficient global supply chain with a variable, low-cost operating model that enables it to maintain sustainable revenue growth and expand margins. Broadcom is expected to benefit from rapid increases in data center IP and mobile data traffic to emerge as the undisputed leader in the enterprise storage market. However, Broadcom’s rapidly evolving technical standards and high R&D costs associated with new products put pressure on its profitability to some extent.


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