Information Technology Broadcom shares fall after disappointment over forecast
The chip company Broadcom has grown rapidly through acquisitions, but has disappointed the stock market with its business outlook.
06.09.2024, 00:17
SDA
The share fell by over five percent at times in US after-hours trading. Broadcom forecast revenues of around 14 billion dollars for the current financial quarter. Analysts, however, had expected an average forecast of a good 14.1 billion dollars. Broadcom's business outside the AI market is growing more slowly than originally expected.
Sales increase after VMware acquisition
In the last quarter ended July, turnover rose by 47 percent year-on-year to around 13.1 billion dollars, exceeding market expectations. However, the acquisition of the software company VMware was the main reason for the sharp rise. Without its business, there would have been an increase of four percent. Technology for applications with artificial intelligence is expected to generate twelve billion dollars in sales for Broadcom this financial year. At the bottom line, Broadcom posted a quarterly loss of 1.875 billion dollars after a profit of 3.3 billion dollars a year earlier. According to the company, the red figures were triggered by a charge of 4.5 billion dollars as a result of the relocation of copyrights to the USA as part of a restructuring of the supply chain.
The Group had grown strongly in recent years through acquisitions, among other things. The company's products can be found in data centers, cars and smartphones, among other things. Apple is also one of its customers.
