Avago Q4 Earnings Top Expectations, Shares Surge

Shares of

surged over 9 percent in after-hours trading Wednesday after the company reported better-than-expected earnings for its fiscal fourth quarter. The Singapore-based company reported a quarterly profit of $429 million, or $1.49 per share, versus a year-ago profit of $135 million, or $0.50 per share. Excluding items, the company's earnings from continuing operations rose to $2.51 per share from $1.99 per share. Its revenue climbed 16 percent to $1.84 billion, while revenue from continuing operations rose to $1.85 billion. However, analysts were expecting earnings of $2.38 per share on revenue of $1.85 billion. Wireless-communications-segment revenue climbed 8 percent, while enterprise-storage revenue surged 38 percent. Gross margin expanded to 54 percent of net revenue, versus 50 percent of net revenue. Operating expenses slipped to $483 million from $487 million. At the end of the fourth fiscal quarter, Avago's cash balance was $1,822 million, versus $1,354 million at the end of the previous quarter. For the fiscal first quarter, Avago expects revenue of $1,768 million +/- $25 million, versus analysts' estimates of $1.82 billion. Avago shares climbed 9.49 percent to $144.76 in the after-hours trading session.