Broadcom Reports Second Quarter 2015 Results

(PRNewswire) —  

 

Second Quarter 2015 Results


GAAP


Non-GAAP

Net revenue


$2.10 billion



Net income per share


$.63


$.72


 

Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in semiconductor solutions for wired and wireless communications, today reported unaudited financial results for its second quarter ended June 30, 2015.

"Broadcom delivered revenue that was up sequentially and year over year during the second quarter, driven by growth in the high-end smartphone, broadband access, and networking markets," said Scott McGregor, Broadcom's President and Chief Executive Officer.  "The most important news in the quarter was the May 28th announcement of the agreement for Avago Technologies Limited to acquire Broadcom.  Once closed, we expect this transaction to create the world's leading diversified communications semiconductor company with combined annual revenue of approximately $15 billion.  We expect this transaction to significantly enhance long term shareholder value and are excited about the future of the combined company."

Net revenue for the second quarter of 2015 was $2.10 billion. This represents an increase of 1.8% compared with the $2.06 billion reported for the first quarter of 2015 and an increase of 2.7% compared with the $2.04 billion reported for the second quarter of 2014. Net income computed in accordance with U.S. generally accepted accounting principles (GAAP) for the second quarter of 2015 was $386 million, or $0.63 per share (diluted), compared with GAAP net income of $209 million, or $0.34 per share (diluted), for the first quarter of 2015 and GAAP net loss of $1 million, or $0.00 per share (diluted), for the second quarter of 2014.

GAAP net income for the second quarter of 2015 included costs associated with the proposed acquisition by Avago of $22 million, or $0.04 per share. GAAP net income for the first quarter of 2015 included impairment charges for long-lived assets of $143 million, or $0.23 per share. GAAP net loss for the second quarter of 2014 included charges for the impairment of long-lived assets, restructuring costs and an inventory write-down related to our decision to exit the cellular baseband business totaling $187 million, or $0.32 per share, and additional charges for the impairment of other purchased intangible assets, settlement costs and other gains of $48 million, or $.08 per share.

In addition to GAAP results, Broadcom reports adjusted net income and adjusted net income per share, referred to respectively as "non-GAAP net income" and "non-GAAP diluted net income per share." A discussion of Broadcom's use of these and other non-GAAP financial measures is set forth below. Reconciliations of GAAP to non-GAAP financial measures for the three months ended June 30, 2015, March 31, 2015 and June 30, 2014, respectively, and the six months ended June 30, 2015 and 2014 appear in the financial statements portion of this release under the heading "Unaudited Schedule of Selected GAAP to Non-GAAP Adjustments."

Non-GAAP net income for the second quarter of 2015 was $445 million, or $0.72 per share (diluted), compared with non-GAAP net income of $390 million, or $0.64 per share (diluted), for the first quarter of 2015 and non-GAAP net income of $290 million, or $0.49 per share (diluted), for the second quarter of 2014.

The financial results included in this release are unaudited. The audited financial statements of the company for the year ended December 31, 2014 are included in Broadcom's Annual Report on Form 10-K, filed with the SEC on January 29, 2015.

In light of Broadcom's pending transaction with Avago, Broadcom will discontinue conducting conference calls with analysts and investors to discuss its financial results.

About Broadcom
Broadcom Corporation (NASDAQ: BRCM), a FORTUNE 500® company, is a global leader and innovator in semiconductor solutions for wired and wireless communications. Broadcom® products seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environments. With one of the industry's broadest portfolio of state-of-the-art system-on-a-chip solutions, Broadcom is changing the world by Connecting everything®. For more information, go to www.broadcom.com.

Note Regarding Use of Non-GAAP Financial Measures
Broadcom reports the following measures in accordance with GAAP and on a non-GAAP basis: (i) cost of revenue, (ii) gross profit, (iii) gross margin, (iv) net income (loss), and (v) diluted net income (loss) per share (EPS). Broadcom's non-GAAP cost of revenue, non-GAAP gross profit, and non-GAAP gross margin excludes certain charges related to acquisitions and certain inventory charges relating to its decision to exit the cellular baseband business. Acquisition-related charges include the amortization of purchased intangible assets and the amortization of acquired inventory valuation step-up. In addition to the exclusions noted above, Broadcom's non-GAAP net income and diluted net income per share also exclude impairment of long-lived assets, settlement costs (gains), restructuring costs (reversals), costs associated with the proposed acquisition by Avago, charitable contributions, gain on sale of assets, gains (losses) on strategic investments, other charges (gains), tax benefits resulting from reductions in U.S. valuation allowance on certain deferred tax assets due to the recording of net deferred tax liabilities for identifiable intangible assets under purchase accounting, and tax benefits resulting from the reduction of certain foreign deferred tax liabilities due to the impairment of long-lived assets. Reconciliations of GAAP to non-GAAP financial measures for the three months ended June 30, 2015, March 31, 2015 and June 30, 2014, respectively, and the six months ended June 30, 2015 and 2014 appear in the financial statements portion of this release under the heading "Unaudited Schedule of Selected GAAP to Non-GAAP Adjustments." Some totals or amounts may not add or conform to prior period presentations due to rounding.

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