Broadcom shares fall after company reports losses, disappointing revenue outlook

Key recommendations

• Broadcom posted a loss in its fiscal third quarter, primarily due to amortization costs related to the acquisition.

• The company continues to integrate software firm VMWare, which it acquired in November.

• The company’s forecast for the fiscal fourth quarter came in just below analysts’ expectations.

Broadcom (AVGO) shares fell after the closing bell on Thursday, falling after quarterly results that posted losses due to increased merger-related expenses.

The semiconductor company posted a net loss of $1.875 billion, compared with a profit of $3.3 billion in the year-ago quarter. Adjusting for $1.5 billion in amortization of acquisition-related intangible assets and other restructuring costs, Broadcom’s earnings were $1.24 per share.

The company estimated fiscal revenue of $14 billion for the fourth quarter, which was slightly below analysts’ consensus. CEO Hock Tan said the company expects annual AI revenue to be $12 billion, “driven by Ethernet networks and custom accelerators for AI data centers.”

Broadcom acquired software firm VMware in November 2023. “Broadcom’s third quarter results reflect the continued strength of our semiconductor solutions (artificial intelligence) and VMware,” Tan said.

Broadcom shares fell more than 6 percent in after-hours trading. They have grown substantially this year, increasing by around 40%.

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