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Broadcom Corp. Reports Operating Results (10-Q)

July 24, 2012 | About:
10qk

10qk

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Broadcom Corp. (BRCM) filed Quarterly Report for the period ended 2012-06-30.

Broadcom Corporation has a market cap of $17.42 billion; its shares were traded at around $32.5 with a P/E ratio of 17.6 and P/S ratio of 2.4. The dividend yield of Broadcom Corporation stocks is 0.3%. Broadcom Corporation had an annual average earning growth of 43.5% over the past 5 years.

Highlight of Business Operations:

Broadband Communications. The increase in net revenue in the three months ended June 30, 2012 as compared to three months ended June 30, 2011 resulted primarily from an increase in demand for our broadband modems of $52 million, partially offset by a reduction in demand for our set-top boxes of $11 million and our digital television and Blu-ray Disc products of $11 million. The increase in net revenue in the six months ended June 30, 2012 as compared to the six months ended June 30, 2011 resulted primarily from an increase in demand for our broadband modems of $65 million, partially offset by a reduction in demand for our digital television and Blu-ray Disc products of $32 million. The increase in net revenue in the three months ended June 30, 2012 as compared to the three months ended March 31, 2012, resulted primarily from an increase in demand for our broadband modems of $49 million. Broadband modem and set-top box growth is generally driven by an increase in the number of global subscribers for broadband access and pay-TV services, as well as the adoption of faster modems and the roll out of more highly integrated set-top box platforms by global service providers. The decrease in our digital television and Blu-ray Disc products was the result of our decision to move away from those particular consumer electronic markets.

compared to the six months ended June 30, 2011 resulted primarily from an increase in demand for our cellular baseband and wireless connectivity products of $127 million and other wireless technologies of $20 million, partially offset by a decrease in demand for our multimedia co-processors of $38 million. The increase in net revenue in the three months ended June 30, 2012 as compared to the three months ended March 31, 2012 resulted primarily from an increase in demand for cellular baseband and wireless connectivity products of $17 million and other wireless technologies of $14 million, partially offset by a decrease in demand for our multimedia co-processors of $6 million. Growth in our baseband and wireless connectivity businesses has been driven by increased demand for our 3G baseband solutions and higher-end devices which require WiFi and Bluetooth connectivity, which more than offset the anticipated softness in demand for our 2G basebands. The multimedia co-processors business has declined due to the end of life of certain customer products.

Infrastructure & Networking. The increase in net revenue for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011 resulted primarily from an increase for our communication processors of $77 million, partially offset by softness in sales of Ethernet switches and PHYs of $18 million. The increase in net revenue for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011 resulted primarily from an increase in demand for our communication processors of $107 million, partially offset by softness in sales of Ethernet switches and PHYs of $56 million. The increase in communication processors for the three and six month ended June 30, 2012 was the result of our acquisition of NetLogic in February 2012. The decrease in Ethernet switches and PHYs was primarily due to softness in service provider spending as compared to the corresponding periods in 2011. The increase in net revenue for the three months ended June 30, 2012 as compared to the three months ended March 31, 2012 resulted primarily from an increase in revenue from communication processors of $47 million related to the full quarter impact in net revenue associated with our acquisition of NetLogic, as well as increased demand for our Ethernet switch and PHYs of $25 million driven primarily from growth in the service provider market.

Rebates. We recorded rebates to certain customers of $149 million, or 7.6% of net revenue, $147 million, or 8.0% of net revenue, and $163 million, or 9.1% of net revenue, in the three months ended June 30, 2012, March 31, 2012, and June 30, 2011, respectively. We recorded rebates to certain customers of $296 million, or 7.8% of net revenue, and $314 million, or 8.7% of net revenue in the six months ended June 30, 2012 and 2011, respectively. We reverse the accrual of unclaimed rebate amounts as specific rebate programs contractually end or when we believe unclaimed rebates are no longer subject to payment and will not be paid. We reversed accrued rebates of $2 million, $3 million and $5 million in the three months ended June 30, 2012, March 31, 2012 and June 30, 2011, respectively. We reversed accrued rebates of $5 million and $7 million in the six months ended June 30, 2012 and 2011, respectively. We anticipate that accrued rebates will vary in future periods based upon the level of overall sales to customers that participate in our rebate programs.

respectively. Our effective tax rates were (5.3)% and (27.2)% for the three and six months ended June 30, 2012, respectively, and (2.3)% and 0.2% for the three and six months ended June 30, 2011, respectively. The difference between our effective tax rates and the 35% federal statutory rate resulted primarily from foreign earnings taxed at rates lower than the federal statutory rate in the three and six months ended June 30, 2012 and 2011, tax benefits resulting primarily from the expiration of statutes of limitations for the assessment of taxes in various foreign jurisdictions of $5 million and $7 million for the three and six months ended June 30, 2012, respectively, and $5 million and $6 million for the three and six months ended June 30, 2011, respectively, and tax benefits resulting from reductions in our U.S. valuation allowance on certain deferred tax assets due to recording net deferred tax liabilities for identifiable intangible assets under purchasing accounting of $4 million for our acquisition of BroadLight for the three months ended June 30, 2012, and $47 million for our acquisition of NetLogic for the six months ended June 30, 2012.

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