(Updated - December 8, 2023 5:39 AM EST)
Investing.com - Broadcom (NASDAQ:AVGO) reported better-than-expected fourth-quarter results, but the chipmaker's guidance for annual revenue missed Wall Street estimates.
Broadcom Inc (AVGO) was up 0.7% in pre-market Friday trade following the report.
Broadcom reported Q4 adjusted EPS of $11.06 on revenue of $9.30B. Analysts polled by Investing.com anticipated EPS of $10.96 on revenue of $9.28B.
The beat on the bottom line was "driven by investments in accelerators and network connectivity for AI by hyperscalers," the company said.
Semiconductor solutions, its core business, rose 3% to $7.33B, while infrastructure software added 7%% to $2.00 billion.
Following the finalization of the VMware (NYSE:VMW) acquisition, the company hiked up its quarterly dividend by 14% to $5.25.
Looking ahead, fiscal 2024 revenue guidance was $50B, missing expectations of $50.25B. Broadcom said VMware will contribute $12 billion for 11 months of FY24.
"The deal might make things a little messy for a while as Broadcom works through integration and synergy capture (the company suggested >40% of the cost base will come out on a runrate basis by year-end, and will be selling off some non-core parts of the business)," analysts at Bernstein, who lifted the price target to $1,150 per share, said.
"However, the VMware strategy appears build not only around taking out cost, but also to drive growth (primarily through increasing share-of-wallet)."
BofA analysts reiterated a Buy rating on AVGO stock due to a "unique combo od product cycles, FCF generation/returns."
Additional reporting by Senad Karaahmetovic
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Additional reporting by Lon Juricic