Broadcom reports Q4 results: ‘there’s nothing here not to like’

Broadcom Inc (NASDAQ: AVGO) reported strong results for its fiscal fourth quarter on Thursday. Shares jumped nearly 8.0% after the company’s board authorised a new share repurchase programme worth $10 billion.

It was a flawless quarter

On CNBC’s “Closing Report”, Bernstein’s Stacy Rasgon said there was nothing negative in Broadcom’s earnings report.

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There’s nothing here not to like. It’s a great report. Nice solid beat, big raise, a 14% increase in dividend, and a $10 billion buyback. We were expecting some kind of return, either M&A or buyback. Looks like they couldn’t find anything to buy, so they’re giving cashback.

Broadcom has been focusing on buying sticky “mission-critical enterprise software businesses” lately.

Q4 financial performance

Broadcom said its net income printed at $1.91 billion ($4.45 per share) versus the year-ago figure of $1.25 billion ($2.93 per share). On an adjusted basis, it earned $7.81 a share – an increase from last year’s $6.35 a share.

At $7.41 billion, the semiconductor manufacturing company noted a year-over-year growth of nearly 15%. According to FactSet, experts had forecast $7.74 of adjusted EPS on $7.36 billion in revenue.

What else was noteworthy?

Chip sales were up 76%, and infrastructure software sales came in 24% higher than last year – both ahead of expectations. The U.S. firm valued its cash and equivalents at $12.16 billion and declared a dividend of $4.10 per share – a 14% increase.

For the fiscal first quarter, Broadcom topped estimates by a significant margin. It is calling for $7.6 billion in revenue versus $7.24 billion expected, as per the earnings press release.