The global designer and supplier broadcom has announced its income index for the last quarter of this year, placing these above the estimates made by Wall Street analysts.
The forecasts were for 10.28 dollars per share and they have finally risen to $10.45 profit. Thus, Broadcom shares gain 3.36% and are listed at $548.95 in afer-hours price.
It’s true that the company’s stock is down by more than 20% this year, but still, rose 3% in extended trading. Despite the pessimism of analysts, Broadcom pegged its third-quarter revenue at $8.9 billion, and it has far exceeded it, hitting $8.9 billion. 8.930 million dollars, that is, 200 million more than those predicted by the studies. To this we must add that semiconductor revenues grew by 26%, as supply chain restrictions were eased considerably.
The market sometimes takes unexpected turns and this exponential growth of Broadcom, which escapes all previous stock market research, shows it. Companies have been investing in recent years, especially after the pandemic, in the infrastructure that will lead them to hybrid work models. So companies like Broadcom, which makes chips for data centers, networking equipment, routers and WI-FI modems, gain weight against their main competitors.
In addition, Broadcom will benefit from the global launch of 5G and if foray into the field of software, since the American company has the manufacturer of iPhone Apple.
a major purchase
In recent months, Broadcom has made headlines by confirming the purchase of VMware for 61,000 million dollars, assuming $8 billion of net debt. In return, the company will incorporate VMware’s portfolio of products and services and offer customers a platform of infrastructure solutions that can protect applications at scale in all types of environments, from the cloud to the edge.
The current shareholders of Broadcom become owners of 88% of the titles of the merger, while those of VMware took control of 12% of the titles of that new company. But Broadcom has maintained its current dividend policy and offers 50% of its fiscal year free cash flow to shareholders.
The merger has been seen with good eyes by both parties, since in this way it is possible to offer the client value and innovation in terms of software in the multi-cloud era (ability to distribute applications and services through a combination of clouds). In addition, the merger of Broadcom and VMware does not mean a price increase, since its priority is to bet on research and development in favor of the evolution of its clients’ businesses.
The merger between the two companies will not mean that VMware’s new multicloud tools and products, such as VMware Explore, they are superseded in the background, quite the opposite. In addition to its native cloud management service, VMware Aria and its integrated security features will continue to be at the forefront.
Therefore, the union between VMWare and Broadcom is expected to be completed in early 2023, since it is currently in the approval phase by regulatory entities. One of the premises that is becoming clear is that VMWare continues to function independentlythat is, making their own strategic plans and projects.