Broadcom Inc. Announces Fourth Quarter and Fiscal Year 2018 Financial Results and Quarterly Dividend

- Revenue of $5,444 million for the fourth quarter, up 12 percent from the prior year

SAN JOSE, Calif., Dec. 6, 2018 — (PRNewswire) — Broadcom Inc. (Nasdaq: AVGO), a global technology leader that designs, develops and supplies semiconductor and infrastructure software solutions, today reported financial results for the fourth fiscal quarter and fiscal year ended November 4, 2018, and provided guidance for its fiscal year 2019. The Company completed its acquisition of CA Technologies on November 5, 2018. The financial results provided below do not include any contribution from CA Technologies.

"Strong operating performance in the fiscal fourth quarter caps a year of solid results that continues to reinforce the sustainability of our business model. Revenues grew 18% to nearly $21 billion on the back of strong demand for our networking, enterprise storage, wireless and industrial products while operating margin continued to progressively expand to 50%," said Hock Tan, President and CEO of Broadcom Inc. "Looking forward to fiscal year 2019, we expect another year of double digit revenue growth. Sustained demand within our semiconductor segment will be augmented by the newly acquired mainframe and enterprise software businesses to our infrastructure software segment. We also expect operating margin to hit another record in fiscal year 2019 driven by improved operating leverage."

"Free cash flow from operations grew 50% in fiscal year 2018 to $8.2 billion. As a result, we are raising our target dividend by 51 percent to $2.65 per share per quarter for fiscal year 2019," said Tom Krause, CFO of Broadcom Inc. "Looking ahead for the year, we expect sustained revenue growth and improving operating leverage to accelerate cash generation from operations. Our capital allocation strategy remains unchanged for fiscal year 2019. We plan to return 50% of our prior fiscal year free cash flows to stockholders in the form of dividends and use the balance of our free cash flows to buy back stock and support additional acquisitions, while remaining focused on maintaining our investment grade credit rating." 

Fourth Quarter Fiscal Year 2018 GAAP Results from Continuing Operations

Net revenue was $5,444 million, an increase of 8 percent from $5,063 million in the previous quarter and an increase of 12 percent from $4,844 million in the same quarter last year.

Gross margin was $2,935 million, or 53.9 percent of net revenue. This compares with gross margin of $2,619 million, or 51.7 percent of net revenue, in the prior quarter, and gross margin of $2,383 million, or 49.2 percent of net revenue, in the same quarter last year.

Operating expenses were $1,283 million. This compares with $1,280 million in the prior quarter and $1,628 million in the same quarter last year.

Operating income was $1,652 million, or 30.3 percent of net revenue. This compares with operating income of $1,339 million, or 26.4 percent of net revenue, in the prior quarter, and operating income of $755 million, or 15.6 percent of net revenue, in the same quarter last year.

Net income, which includes the impact of discontinued operations, was $1,115 million, or $2.64 per diluted share. This compares with net income of $1,196 million, or $2.71 per diluted share, in the prior quarter, and net income of $561 million, or $1.25 per diluted share, in the same quarter last year.

 

Fourth Quarter Fiscal Year 2018 GAAP Results








Change

(Dollars in millions, except per share data)                      


Q4 18


Q3 18


Q4 17


Q/Q


Y/Y

Net revenue


$    5,444


$    5,063


$    4,844


+8%


+12%

Gross margin


53.9%


51.7%


49.2%


+220bps


+470bps

Operating expenses


$    1,283


$    1,280


$    1,628


+$      3


-$      345

Net income


$    1,115


$    1,196


$       561


-$    81


+$      554

Net income attributable to noncontrolling interest


$            -


$            -


$         29


$       -


-$        29

Net income attributable to common stock


$    1,115


$    1,196


$       532


-$    81


+$      583

Earnings per share - diluted


$      2.64


$      2.71


$      1.25


-$ 0.07


+$     1.39


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