Broadcom share price falls after disappointing forecast

The chip company Broadcom has disappointed the stock market with its business outlook. The share price fell by over five percent at times in US after-hours trading. Broadcom forecast revenues of around 14 billion dollars for the current financial quarter.

However, analysts had expected an average forecast of just over 14.1 billion dollars. Broadcom’s business outside the AI market is growing more slowly than originally expected.

In the last quarter ended July, turnover rose by 47% year-on-year to around 13.1 billion dollars, exceeding market expectations. However, the acquisition of the software company VMware was the main reason for the sharp rise. Without its business, there would have been an increase of four percent. Technology for applications with artificial intelligence is expected to generate twelve billion dollars in sales for Broadcom this financial year.

At the bottom line, Broadcom posted a quarterly loss of 1.875 billion dollars after a profit of 3.3 billion dollars a year earlier. According to the company, the red figures were triggered by a charge of 4.5 billion dollars as a result of the relocation of copyrights to the USA as part of a restructuring of the supply chain.

Broadcom has grown strongly in recent years, partly through acquisitions. The company’s products can be found in data centers, cars and smartphones, among other things. Apple is also one of its customers.

dpa