) recently announced that the company will offer $500 million of
The company expects to use the net proceeds from the offering to
fund a portion of its proposed acquisition of NetLogic Microsystems
and other general corporate purposes.
In September, Broadcom Corporation announced that it will
acquire NetLogic Microsystems for $3.7 billion or $50 per
Headquartered in Santa Clara, California, NetLogic develops
high-performance intelligent semiconductor solutions that power
next-generation Internet networks.
The transaction is expected to close in the first half of 2012.
Broadcom expects the acquisition to be accretive to
bottom-line by approximately $0.10 (excluding onetime items)
Management expects the acquisition to broaden Broadcom's
infrastructure portfolio with a number of critical new product
lines and technologies, including knowledge-based processors,
multi-core embedded processors, and digital front-end processors.
The company stated that through this acquisition, Broadcom
will acquiring a leading multi-core embedded processor solution,
market leading knowledge-based processors, and unique digital
front-end technology for wireless base stations that are key
enablers for the next generation infrastructure build-out.
Last month, Broadcom generated revenues of $1.96 billion in the
third quarter of 2011, up 8.4% year over year.
In terms of end-markets, the Broadband Communications revenue
increased 2% sequentially, driven by solid sales from core set-top
boxes partially offset by a decline in broadband modem
The Infrastructure & Networking business was up 4%
sequentially driven by a rebound in controller solutions, microwave
sales and growth in switching products. Enterprise revenue was
better than management expectations. Data Center sales increased
sequentially, but service provider solutions were soft.
The Mobile and Wireless business grew 16% sequentially driven by
a significant expansion in sales across wireless connectivity and
cellular baseband solutions. Within the cellular baseband market,
Broadcom is pleased with the significant growth in 3G shipments to
Samsung and multiple other handset OEMs.
Broadcom's net income came in at $270 million or $0.48 per
diluted share compared to a net income of $175 million or $0.31 per
diluted share in the previous quarter and a net income of $328
million or $0.60 per diluted share in the year-ago quarter. The net
income per share came reported in the quarter missed the Zacks
Consensus Estimate of $0.40.
For the fourth quarter of 2011, Broadcom projects revenues
around $1.7 billion - $1.8 billion. Management expects revenues
from all segments to be down sequentially across all segments
driven by softness in general demand. The company expects revenues
from Mobile & Wireless business to decline sequentially.
We continue to maintain a Neutral recommendation on Broadcom.
Our Neutral recommendation is supported by Zacks #3 Rank, which
translates into a short-term rating of Hold.
BROADCOM CORP-A (
): Free Stock Analysis Report