U.S. stocks were in negative territory on Friday amid concerns of the U.S.-China trade war.The Dow Jones Industrial Average fell 0.11% to 26,077, the S&P 500 index retreated 0.24% to 2,884 and the Nasdaq Composite Index swelled 0.53% to 7,795.
Shares of Broadcom Inc. (AVGO, Financial) fell more than 6% on Friday after the company announced second-quarter results. Revenue grew 10% from the prior-year quarter to $5.52 billion, but fell $180 million short of analysts’ expectations. Earnings of $5.21 per share topped estimates by 3 cents.
The gross margin was $3.08 billion, or 56% of net revenue, higher than gross margin of $2.5 billion, or 50.9% of net revenue, in the year-ago quarter. Operating expenses were $2.1 billion, up 57% from $1.35 billion. Further, the operating income was $970 million, or 17.6% of net revenue, down from operating income of $1.20 billion, or 24% of net revenue, in the comparable period of last year.
Cash from operations was $2.6 billion, compared to $2.3 billion in the same quarter last year. The free cash flow from operations was $2.5 billion, up from $2.12 billion.
"We achieved record free cash flow of $2.5 billion growing 20% year over year in the second quarter," Chief Financial Officer Tom Krause said. "Despite the challenging market backdrop and updated revenue outlook, we still expect to grow free cash flow by a double-digit percentage for the year. In addition, we remain focused on completing a total of $8 billion of share repurchases and eliminations in fiscal 2019."
Looking ahead to full fiscal 2019, the company expects net revenue of $22.5 billion with an operating margin of 52.5%.
Gainers
- CF Industries Holdings Inc. (CF, Financial)
- Weyerhaeuser Co. (WY, Financial)
- AES Corp. (AES, Financial)
- Ulta Beauty Inc. (ULTA, Financial)
- Home Depot Inc. (HD, Financial)
Losers
- F5 Networks Inc. (FFIV, Financial)
- National Oilwell Varco Inc. (NOV, Financial)
- Fastenal Co. (FAST, Financial)
- Advanced Micro Devices Inc. (AMD, Financial)
- Cimarex Energy Co. (XEC, Financial)
Global markets
The main European stock markets traded in the red. The U.K.'s FTSE 100 fell 0.31%, France's CAC 40 retreated 0.15%, Germany's Dax slid 0.60% and Spain's IBEX 35 dipped 0.57%.
In Asia, Japan's Nikkei 225 rose 0.40%, India’s BSE Sensex fell 0.73%, Hong Kong's Hang Seng retreated 0.65% and China's Shanghai Composite closed 0.99% lower.
Disclosure: The author holds no positions in any stocks mentioned.
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