What To Expect From Broadcom’s (AVGO) Q2 Earnings

Petr Huřťák /
2023/05/31 2:56 am EDT

Fabless chip and software maker Broadcom (NASDAQ:AVGO) will be reporting earnings tomorrow after market close. Here's what to expect.

Last quarter Broadcom reported revenues of $8.92 billion, up 15.7% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a meaningful improvement in inventory levels. However, gross margin declined, and the revenue growth was weak.

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This quarter analysts are expecting Broadcom's revenue to grow 7.45% year on year to $8.71 billion, slowing down from the 22.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $10.14 per share.

Broadcom Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 0.95%.

Looking at Broadcom's peers in the processors and graphics chips segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Lattice Semiconductor delivered top-line growth of 22.5% year on year, beating analyst estimates by 3.36% and Qorvo reported revenue decline of 45.7% year on year, exceeding estimates by 1.83%. Lattice Semiconductor traded down 3.79% on the results, Qorvo was up 6.87%. Read our full analysis of Lattice Semiconductor's results here and Qorvo's results here.

There has been positive sentiment among investors in the processors and graphics chips segment, with the stocks up on average 15.9% over the last month. Broadcom is up 31.4% during the same time, and is heading into the earnings with analyst price target of $724.8, compared to share price of $804.7.

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The author has no position in any of the stocks mentioned.