Broadcom's three-headed silicon business approach--wireless connectivity devices, data center buildouts and residential devices--provided "slightly better (first quarter) revenue and profitability than we originally anticipated," President-CEO Scott McGregor said during an earnings call.
Broadcom net revenue of $1.82 billion was down 6.6 percent over the $1.95 billion in the fourth quarter of last year but up 24.4 percent over last year's $1.46 billion. Net income of $228 million was down from the $266 million earned in the fourth quarter but up from the $210 million reported a year ago.
McGregor said that the company's broadband segment was impacted by an "inventory issue" that should go away in the next quarter. "We believe that one or two customers got ahead of themselves there and probably ordered more than it turned out that they needed," McGregor said, noting that the company believes that situation is "behind us at this point." He declined to name the customers.
Overall, he said, the chipmaker sees a huge upside in the China market and possibilities in the rest of the world.
"There is a cable opportunity in China. There is a DSL opportunity, There is DSLAM opportunity," said McGregor, noting that Broadcom's relatively small market share in Europe could also grow. "I would say a good percentage of our growth over the next couple years will come from international expansion."
- see this news release
Report: Broadcom leads in Wi-Fi chip design wins
Broadcom pushes farther into home network with Gigle acquisition
U.S. vendors tapping emerging Chinese cable market