Avago Technologies Updates Second Quarter Fiscal 2010 Financial Guidance

SAN JOSE, Calif. & SINGAPORE — (BUSINESS WIRE) — April 19, 2010 — Avago Technologies Limited (Nasdaq: AVGO), today announced that, based on preliminary quarter-to-date results, it now expects net revenue in the fiscal quarter ending May 2, 2010 to be up 11% to 13% sequentially from the first fiscal quarter of 2010. Previous guidance issued on February 24, 2010 had been for second quarter revenue to be in the range of up 6% to 9% sequentially. Avago also raised guidance with regard to gross margin and operating expenses.

The improvement in forecasted revenue for the second fiscal quarter is the result of stronger than anticipated sales in the industrial and to a lesser extent in the consumer and computer peripheral target markets. To date, our other target markets are performing consistent with prior expectations.

The improvement in gross margin guidance stems from better product mix shift toward the industrial and automotive electronics target market as well as the ramp of new proprietary OEM programs in the wireless, consumer and computing peripheral and wired communications target markets. The increase in operating expense guidance is due to an increase in revenue dependent expenses.

The updated financial outlook for the second quarter of fiscal year 2010 follows:

   

GAAP

 

Reconciling Items

 

Non-GAAP

Net Revenue (compared to Q1'10) up 11% to 13% up 11% to 13%
Gross Margin 44.5% plus/minus 50 bpt. $16M 47.5% plus/minus 50 bpt.
Operating Expenses $127M $11M $116M

Reconciling items include $15 million of amortization of acquisition-related intangibles and $1 million of share-based compensation at the Gross Margin line and $5 million of amortization of acquisition-related intangibles and $6 million of share-based compensation at the Operating Expenses line.

The guidance provided above is only an estimate of what the Company believes is realizable as of the date of this release. Actual results will vary from the guidance and the variations may be material.

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