Market Overview

Broadcom Considering 'Strategic Options' For Major Business Line

Share:

Shares of Broadcom (NASDAQ: BRCM) shot higher Monday morning after the company said it is considering strategic options for its cellular baseband business. More importantly, Broadcom announced guidance for the current quarter.

Broadcom was not candid in stating that strategic options include the sale or winding down of the business.

Closing the baseband business will save an estimated $700 million in R&D and SG&A expenses. Because roughly $100 million of this relates to stock-based compensation, the non-GAAP savings will be approximately $600 million. According to Broadcom, the sale will help the company develop small cell and low power connectivity with a $50 million increase in spending.

Related: Benzinga Weekly Preview: ECB To Make A Bold Move

Guidance for the upcoming quarter was also announced. Broadcom still sees revenue ranging from $2 billion to $2.1 billion for the quarter ended June 30. Gross margins are expected to be at the top end or above the previously guided range.

Shares of Broadcom were last trading up 12.93 percent to $35.99 in pre-market trading.

Posted-In: basebandNews Guidance Asset Sales

 

Related Articles (BRCM)

View Comments and Join the Discussion!
Need corporate guidance data?
Click here to see licensing options.
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Clinton Group Issues Release Calling for Change at ValueVision, Responds to Board Presentation

Morgan Stanley Expects Small Positive Catalyst From PVH 1Q EPS Report