Broadcom Earnings Edge Estimates. The Stock Slips.

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Broadcom

Shares were falling in late trading Thursday after the semiconductor and software company posted financial results that were a hair above expectations.

For the fiscal third quarter ended July 30, Broadcom (ticker: AVGO ) reported revenue of $8.876 billion, up 5% from a year ago, a smidgen above Street consensus and the company’s own guidance for $8.85 billion. On an adjusted basis, Broadcom earned $10.54 a share for the quarter, slightly topping the consensus estimate of $10.43 a share.

“Broadcom’s third quarter results are driven by demand for next-generation networking technologies. Hyperscale customers are deploying and connecting their AI clusters in data centers,” CEO Hock Tan said in a statement. “Our fourth-quarter outlook projects year-over-year growth, reflecting continued leadership in the network for generative AI.”

Broadcom projects revenue of $9.27 billion in the fiscal fourth quarter, up 4% from a year ago and in line with Street estimates.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, was $5.8 billion, up 8 percent from a year ago. Broadcom had free cash flow of $4.6 billion in the quarter, up 7% from a year ago. The company repurchased $2.2 billion of common stock during the quarter.

Broadcom is widely expected to play a role in the development of AI, but investors may be hoping to see some clear signs that the trend will affect financial results.

Broadcom shares were down 3.1% at $894 in late trading, effectively reversing similar gains in Thursday’s regular session.

Write to Eric J. Savitz at [email protected]