Broadcom Corporation today announced its fiscal year 2023 first quarter financial results. According to the report, Broadcom’s first quarter net revenue was $8.915 billion (approximately RMB 61.603 billion), up 16 percent from $7.706 billion a year earlier, compared with $8.930 billion in the previous quarter; net income was $3.774 billion (approximately RMB 26.078 billion), up 53 percent from $2.472 billion a year earlier, compared with $3.620 billion in the previous quarter; and net income was $7.774 billion (approximately RMB 2.678 billion), compared with $7.706 billion in the previous quarter. Net income attributable to common shareholders was also $3,774 million (approximately RMB 26,078 million), compared to net income attributable to common shareholders of $2,398 million in the prior year quarter and net income attributable to common shareholders of $3,311 million in the prior year quarter.
Broadcom’s first-quarter revenue and adjusted earnings per share both beat Wall Street analysts’ previous estimates, as did its outlook for second-quarter revenue in fiscal 2024, pushing its shares slightly higher after hours.
First quarter earnings summary.
For the quarter that ended January 29, 2023, Broadcom reported net income of $3,774 million, up 53 percent from $2,472 million in the prior year quarter, compared to $3,620 million in the prior year quarter; net income attributable to common shareholders was also $3,774 million, compared to $2,398 million in the prior year quarter, and $3,300 million in the prior year quarter. Net income attributable to common stockholders was $3,311 million in the prior year quarter. Broadcom’s first-quarter net income per diluted share attributable to common shareholders was $8.80, compared to $5.59 in the prior year quarter and $7.83 in the prior-year quarter.
Excluding certain one-time items (not in accordance with GAAP), Broadcom reported an adjusted net income of $4,483 million and adjusted diluted earnings per share of $10.33 for the first quarter, which beat analysts’ expectations; Broadcom reported an adjusted net income of $3,741 million and adjusted diluted earnings per share of $8.39 for the same period last year. According to data provided by Yahoo Finance, 21 analysts previously expected Broadcom’s first-quarter adjusted earnings per share to reach $10.1 on average.
Broadcom’s first-quarter earnings of $8.915 billion rose 16 percent from $7.706 billion in the year-ago quarter, compared with $8.930 billion in the previous quarter, a result that also slightly exceeded analysts’ expectations. According to data provided by Yahoo Finance, 19 analysts previously expected Broadcom’s fiscal first-quarter revenue to reach $8.9 billion on average.
By business segment.
- Broadcom’s first-quarter revenue from the Semiconductor Solutions segment was $7.107 billion, up 21 percent from $5.873 billion in the year-ago quarter; its share of net revenue was 80 percent, compared with 76 percent in the year-ago quarter.
- Broadcom’s infrastructure software segment revenue decreased 1 percent to $1,808 million in the first quarter compared to $1,833 million in the prior year quarter and represented 20 percent of net revenue compared to 24 percent in the prior-year quarter.
Broadcom’s total cost of revenue for the first quarter was $2.911 billion, compared with $2.657 billion in the prior year period. Cost of revenue was $2,374 million in the first quarter compared to $1,925 million in the prior year quarter, while amortization of acquisition-related intangible assets was $535 million compared to $730 million in the prior year quarter and restructuring charges were $2 million, flat compared to the prior-year quarter.
Broadcom’s first quarter gross profit was $6.004 billion, compared to $5.049 billion in the prior year quarter and $5.926 billion in the prior-year quarter. Excluding certain one-time items (not in accordance with GAAP), Broadcom reported an adjusted gross profit of $6,578 million in the first quarter, compared with $5,821 million in the prior year quarter and $6,673 million in the prior year quarter.
Broadcom’s total operating expenses for the first quarter were $1.901 billion, compared with $1.941 billion in the prior year’s quarter. In the first quarter, Broadcom’s research and development expenses were $1,195 million, compared to $1,206 million in the prior year quarter; selling, general and administrative expenses were $348 million, compared to $321 million in the prior year quarter; amortization of acquisition-related intangible assets were $348 million, compared to $397 million in the prior year quarter; and restructuring, impairment and disposal charges were $10 million, compared to $17 million in the prior year quarter. Restructuring, impairment and disposal charges were $10 million compared to $17 million in the prior year quarter.
Broadcom reported an operating profit of $4,103 million in the first quarter, compared with $3,108 million in the prior year quarter and $3,986 million in the prior year quarter. Excluding certain one-time items (not in accordance with GAAP), Broadcom reported an adjusted operating profit of $5,430 million in the first quarter, compared with $4,656 million in the prior year quarter and $5,500 million in the prior year quarter.
In the first quarter, Broadcom generated $4,036 million in cash from business operating activities, compared with $3,486 million in the prior year quarter; $3,923 million in free cash flow, compared with $3,385 million in the prior year quarter; and $103 million in capital expenditures.
Broadcom’s adjusted EBITDA, or net earnings before interest, taxes, depreciation and amortization, was $5,678 million in the first quarter compared to $4,818 million in the prior year quarter.
Broadcom held $12,647 million in cash and cash equivalents at the end of the first quarter of fiscal 2023, compared to $10,219 million at the end of the first quarter of fiscal 2022.
Return of Capital Program.
Broadcom paid a cash dividend of $4.60 per common share on December 30, 2022, and the total cash used to pay this dividend was $1,926 million.
Broadcom’s Board of Directors has approved a quarterly cash dividend of $4.60 per common share, which will be paid on March 31, 2023, to shareholders of record as of the close of business on March 22, 2023.
Performance Outlook.
Based on current business trends and conditions, Broadcom expects to generate net revenues of approximately $8.7 billion for the second quarter of fiscal 2024 ending April 30, 2023, an outlook that exceeds analysts’ expectations; adjusted EBITDA, or net earnings before interest, taxes, depreciation and amortization, will account for approximately 64.5 percent of expected revenues.
According to Yahoo Finance, the 19 analysts previously expected Broadcom’s revenue to reach $8.59 billion in the second quarter of fiscal 2024 on average.
Stock price movement.
On the same day, Broadcom shares rose $5.08, or 0.86 percent, to close at $598.65 in regular Nasdaq trading. In subsequent after-hours trading through 5:59 p.m. ET Thursday (5:59 a.m. BST Saturday), Broadcom shares rose another $1.35, or 0.23 percent, to $600.00. Over the past 52 weeks, Broadcom has traded as high as $645.31 and as low as $415.07.
