By Maria Armental 

Broadcom Inc. on Thursday posted the sixth straight quarter of profit, more than doubling from the prior year as stronger demand for products used in data centers continues to drive sales growth.

In the first earnings report since the company announced plans to buy software company CA Inc. for about $19 billion, Broadcom said wired infrastructure and enterprise storage again drove revenue growth in the latest period, offsetting continued weakness in its wireless communications segment.

The proposed takeover, months after its $117 billion-plus hostile bid for Qualcomm Inc. was blocked by President Trump, represents a strategic move for Broadcom and would roughly triple the size of its current opportunity in the estimated $200 billion market for infrastructure technology, Broadcom finance chief Tom Krause told The Wall Street Journal in an interview.

Meanwhile, enterprise storage revenue, up nearly 60% three quarters into the company's business year, has been bolstered by last year's Brocade acquisition. Stripping out the Brocade contribution, Chief Executive Hock Tan told analysts in June that the business would be roughly flat year-over-year.

Overall, Broadcom's third-quarter profit surged to $1.2 billion, or $2.71 a share, from $481 million, or $1.14 a share, a year earlier. Profit from continuing operations rose to $4.98 a share from $4.10 a share a year earlier.

Revenue from continuing operations rose 13% to $5.07 billion.

Analysts surveyed by Thomson Reuters expected Broadcom to post a profit of $2.70 a share, or $4.83 as adjusted, on $5.07 billion in revenue.

Gross profit margin improved to 51.7% from 48.2% a year earlier.

This quarter, Broadcom expects about $5.4 billion in revenue, compared with analysts' projected $5.35 billion.

Shares, which lag the market with a 16% decline this year, rose 3.4% to $223.29 in after-hours trading.

Write to Maria Armental at maria.armental@wsj.com

 

(END) Dow Jones Newswires

September 06, 2018 18:38 ET (22:38 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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