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Broadcom (AVGO) Stock Pops on Q3 Earnings Beat

  • Broadcom (AVGO) beat second-quarter earnings and revenue estimates.
  • The company also announced a better-than-expected revenue forecast for the upcoming quarter.
  • AVGO stock caught a bid as traders cheered the positive results and guidance.
AVGO stock - Broadcom (AVGO) Stock Pops on Q3 Earnings Beat

Source: Sasima / Shutterstock.com

Semiconductor device maker Broadcom (NASDAQ:AVGO) knocked it out of the park with across-the-board beats in its third-quarter fiscal 2022 report. Furthermore, Broadcom’s revenue guidance came in above Wall Street’s expectation. Consequently, AVGO stock is powering higher today.

Broadcom, like other tech component manufacturers in the U.S., have had to deal with labor and materials shortages this year. High inflation also created a headwind for Broadcom, no doubt.

Yet the company apparently worked through these obstacles and delivered outstanding quarterly results. For example, Broadcom reported quarterly revenue of $8.46 billion, up 25% year-over-year (YOY). This result topped Wall Street’s expectation of $8.41 billion.

Furthermore, Broadcom disclosed quarterly adjusted earnings of $9.73 per share, marking a vast improvement over the prior-year quarter’s $6.96 per share. Meanwhile, analysts had forecast earnings of $9.56 per share.

Not only that, but for the fiscal fourth quarter, Broadcom is now anticipating $8.9 billion in revenue. Analysts, in contrast, had predicted $8.77 billion.

What’s Happening With AVGO Stock?

Today’s traders were understandably impressed with Broadcom’s top- and bottom-line beats. Perhaps they were also pleased with the company’s higher-than-expected revenue guidance. So, they had multiple reasons to bid up the AVGO stock price this morning. Soon after the opening bell rang, Broadcom shares gained 4%.

Meanwhile, Broadcom remains an unabashed dividend king. Broadcom CFO Kirsten Spears proudly pointed out that the company “returned $3.2 billion to shareholders including $1.7 billion of cash dividends” during the reported quarter. At the time of this writing, Broadcom’s forward annual dividend yield is 3.33%.

Spears also stated that Broadcom enacted $1.5 billion worth of share repurchases and generated free cash flow of $4.3 billion during the third fiscal quarter. Additionally, Spears expects free cash flow “to be strong in the fourth quarter.”

That’s a confident statement. However, the quarterly results seem to justify an optimistic stance on Broadcom. If this trend continues, Broadcom could continue to provide an attractive combo of share-price appreciation and dividend payouts for the foreseeable future.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


Article printed from InvestorPlace Media, https://investorplace.com/2022/09/broadcom-avgo-stock-pops-on-q3-earnings-beat/.

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