Broadcom on Tuesday said its third quarter revenue rose 5.3 percent to $2.26 billion, while its net income improved to $98 million from a net loss of $1 million.
Net income included charges for restructuring costs of $114 million related to Broadcom’s exit from cellular baseband business. Broadcom expects to record an additional $60 million of restructuring charges over the next 12 months related to the closing or consolidation of 18 locations and the termination of certain existing contracts.
The marginal revenue growth was driven by its broadband and connectivity business.
Several telecom operators deployed the latest broadband technologies including VDSL upgrades to drive faster connections in the home. “Connectivity rebounded, driven by demand and new phone watches as well as increasing penetration of 802.11ac and 2X2 solutions,” said Scott McGregor, president and chief executive officer, Broadcom.
Broadcom has also strengthened its presence in the set-top-box business driven by growth in the emerging markets deploying new HD designs, particularly in Latin America.
In infrastructure, Broadcom business was roughly flat due to a pause in data center and service provider spending.
Broadcom posted $651 million revenue from infrastructure and networking segment. Its revenue in the cellular baseband was $97 million.
Revenue from the broadband and connectivity business was $1.5 billion.
Broadcom has improved market share in VDSL due to increased operator spending and a mix of technologies such as vectoring and channel bonding. It expects the next DSL standard, G.fast to begin ramping in 2015.
Broadcom strategy in Internet of Things (IoT) market is to enable developers to create innovative products using its recently announced WICED Sense development kit.
In Q4 2014, its broadband and connectivity business will be down sequentially.
Broadcom posted $651 million revenue from infrastructure and networking group. Both data center and service provider revenues declined sequentially, partially offset by growth in the enterprise and home market.
In Q4 of 2014, the chip vendor expects its infrastructure and networking business to decrease sequentially.
Baburajan K
editor@telecomlead.com