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Broadcom sees fourth-quarter boost from data center demand, iPhone launch
September 7, 2018 12:00 am|Comments (0)

(Reuters) – Broadcom Inc (AVGO.O) on Thursday forecast current-quarter revenue largely above estimates on higher demand for components that power data centers, while the launch of Apple Inc’s new iPhones is expected to bolster its wireless business.

A sign to the campus offices of chip maker Broadcom Ltd is shown in Irvine, California, U.S., November 6, 2017. REUTERS/Mike Blake/File Photo

Shares of Broadcom rose 4 percent to $ 224.90 in extended trading after the chipmaker also reported third-quarter profit that topped analysts’ estimates.

Revenue from enterprise storage business jumped 70 percent in the reported quarter as the acquisition of Brocade helped drive sales gains at the unit.

Its wireless business, which makes chips for Wi-Fi, Bluetooth, and GPS connectivity, reported flat revenue, while its wired infrastructure unit, which makes components used in telecommunication networks, posted a 4 percent rise from a year earlier.

“More than half our consolidated revenue … is benefiting from strong cloud and enterprise data center spending,” Chief Executive Officer Hock Tan said on a post-earnings call with analysts.

“This, coupled with a seasonal uptick in wireless, will drive our forecast revenue in the fourth quarter.”

The company expects a ramp at its North American customer – which analysts identified as Apple – to drive a 25 percent rise in wireless revenue from the previous quarter, although it may be down in single-digit percentage compared with a year earlier.

Apple (AAPL.O) is set to unveil its new iPhones next week.

Tan, who has transformed Broadcom into a $ 100 billion behemoth through a series of acquisitions, surprised Wall Street in July with his move to acquire software maker CA Technologies for $ 19 billion.

Explaining his rationale behind the CA acquisition, Tan said he planned to target the company’s enterprise customers with Broadcom’s offerings including server and storage connectivity products.

The CA deal comes after U.S. President Donald Trump blocked Broadcom’s $ 117 billion offer to buy Qualcomm Inc (QCOM.O) on national security grounds.

Broadcom forecast current-quarter revenue of about $ 5.40 billion, plus or minus $ 75 million. Analysts on average were expecting revenue of $ 5.35 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to common stock rose to $ 1.2 billion, or $ 2.71 per share, in the quarter ended Aug. 5 from $ 481 million, or $ 1.14 per share, a year earlier.

Excluding items, the company earned $ 4.98 per share.

Net revenue rose to $ 5.06 billion from $ 4.46 billion.

Analysts on average were expecting earnings of $ 4.83 per share on revenue of $ 5.07 billion.

Reporting by Sonam Rai and Sayanti Chakraborty in Bengaluru; Editing by Anil D’Silva

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Apple sees 'strong demand' for replacement iPhone batteries: letter
February 6, 2018 6:02 pm|Comments (0)

WASHINGTON/SAN FRANCISCO (Reuters) – Apple Inc (AAPL.O) has seen “strong demand” for replacement iPhone batteries and may offer rebates for consumers who paid full price for new batteries, the company said in a Feb. 2 letter to U.S. lawmakers made public on Tuesday.

Apple confirmed in December that software to deal with aging batteries in iPhone 6, iPhone 6s and iPhone SE models could slow down performance. The company apologized and lowered the price of battery replacements for affected models from $ 79 to $ 29.

In the letter released Tuesday, amid nagging allegations that it slowed down phones with older batteries as a way to push people into buying new phones, the company said it was considering issuing rebates to consumers who paid full price for replacement batteries.

The letter, released by the U.S. Senate Commerce Committee, also said Apple provided a phone-slowing software update in January 2017 but did not disclose it until a month later.

In the letter, Apple said it had known about battery problems caused by a manufacturing defect as early as fall 2016.

Senator John Thune, a Republican who chairs the committee, said in a statement that “consumers rely on clear and transparent disclosures from manufacturers to understand why their device may experience performance changes.”

Thune said that in discussions with the committee “Apple has acknowledged that its initial disclosures came up short. Apple has also promised the committee some follow-up information, including an answer about additional steps it may take to address customers who purchased a new battery at full price.”

Apple did not immediately comment on Thune’s statement.

Last week, the U.S. Department of Justice and the Securities and Exchange Commission said they were investigating whether Apple violated securities laws concerning its disclosures that it slowed older iPhones with flagging batteries, Bloomberg reported.

In a statement last week, Apple said it had “received questions from some government agencies” and was duly responding to them. The company had “never, and would never, do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades,” the statement said.

Consumers so far have filed some 50 proposed class action lawsuits over Apple’s latest iPhone software update, which they allege caused unexpected shutdowns and hampered the performance of iPhone models of the SE, 6 and 7 lines.

Government agencies in countries ranging from Brazil to France and Italy to South Korea are also investigating Apple following complaints.

Reporting by David Shepardson in Washington and Stephen Nellis in San Francisco, Editing by Franklin Paul and Tom Brown

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