Broadcom piles up the cash but warns on visibility
US semiconductor giant Broadcom, which has operations at Cambridge Science Park and last summer acquired Argon Design in the UK technology cluster, has ramped up revenue and built a substantial cash pile in the first quarter of the 2020 financial year.
But it warns of a lack of visibility over prospects in the company’s global markets so is withdrawing its annual guidance until it gets a better grasp on the global impact of COVID-19 on the bottom line.
Q1 revenue of $5.858 billion was reported but the sustainability of the business is better reflected in the company’s war chest.
President and CEO Hock Tan revealed that the company generated more than $2.2bn in free cash flow in the quarter, which represented nine per cent growth year-on-year.
He said the company’s networking, storage and broadband businesses together “grew nicely year over year.”
Tan added: “The fundamental semiconductor backdrop has been improving and we did not see any material impact on our businesses due to COVID-19 in our first quarter.”
CFO Tom Krause added: “We ended the first quarter with over $6.4 billion of cash on hand and our cash flow outlook remains healthy. As a result, we are well positioned to continue to support our dividends to stockholders despite the challenging market backdrop.”
The company's cash and equivalents at the end of the quarter were $6.444bn compared to $5.055bn at the end of the prior quarter. Second quarter revenue guidance is $5.bn plus or minus $150 million. A quarterly cash dividend of $3.25 per share has been decided for Q1.