Broadcom Limited (AVGO 248.00, +13.41) has spiked 5.7% in pre-market after beating expectations and issuing upbeat guidance. Given its pre-market advance, the stock is set to begin at a fresh record high.
The diversified semiconductor company reported above-consensus second quarter earnings of $3.69 per share on revenue of $4.20 billion, which jumped 17.9% year-over-year and exceeded estimates.
Gross margin from continuing operations grew to 63.1% from 60.0% one year ago and 62.4% in the previous quarter. Operating margin from continuing operations jumped to 44.1% from 37.3% one year ago and 43.5% in the previous quarter.
Looking at the segment breakdown, Wireless Communications revenue grew 45.0% year-over-year to $1.150 billion while Enterprise Storage revenue jumped 36.0% year-over-year to $712 million. Industrial & other revenue increased 23.0% year-over-year to $224 million while the company's largest segment—Wired Infrastructure—saw revenue growth of 3.0% year-over-year to $2.12 billion.
Broadcom Limited's President and CEO Hock Tan said the company expects solid trends to persist into the second half of its fiscal year and feature a seasonal ramp in the wireless segment.
Accordingly, the company issued upbeat third quarter guidance for revenue between $4.38 billion and $4.53 billion, which is ahead of current market expectations.