Shares in Broadcom Inc. fell over 4% in late trading today after the semiconductor maker forecast a lower-than-expected outlook in its latest earnings report.

For its third quarter ended July 30, Broadcom reported adjusted earnings per share of $10.53, up from $9.73 in the same quarter of last year, on revenue of $8.876 billion, up 5% year-over-year. Analysts had been expecting earnings per share of $10.42 on revenue of $8.86 billion.

Broadcom saw growth across its core segments, with semiconductor solutions accounting for $6.941 billion in the quarter, up 5% year-over-year. Infrastructure software also rose 5%, to $1.935 billion. Cash flow from operations in the quarter was $4.719 billion, up from $4.424 billion the year prior, and free cash flow was $4.597 billion.

The company spent $2.167 billion on share repurchases and eliminations and $1.901 billion in dividends to shareholders on June 30.

Business highlights included Broadcom inking a deal with Apple Inc. in May to supply billions of dollars worth of wireless networking components. The agreement includes Broadcom designing and producing multiple types of wireless components for Apple, including modules that can be used to power 5G network connections.

“Broadcom’s third-quarter results were driven by demand for next-generation networking technologies as hyperscale customers scale out and network their AI clusters within data centers,” Hock Tan, president and chief executive office of Broadcom, said in the company’s earnings release. “Our fourth-quarter outlook projects year-over-year growth, reflecting continued leadership in networking for generative AI.”

For its fiscal fourth quarter, Broadcom said it expects revenue of $9.27 billion, below an expected $9.28 billion. Though by no means a big miss, it was enough to hurt Broadcom shares in late trading.

Also reporting earnings today was VMware Inc., which Broadcom entered an agreement to acquire for $61.2 billion in May 2022. The deal is subject to ongoing scrutiny in the U.S., the U.K. and Europe and has yet to receive approval to proceed over a year later, though the companies have said they expect to close the deal by Oct. 30.

For its fiscal second quarter, VMware reported adjusted earnings per share of $1.83, up from $1.64 in the same quarter of last year, on revenue of $3.41 billion, up 2% year-over-year. Analysts had expected VMware to report earnings per share of $1.83 and revenue of $3.45 billion.

“We are pleased with our Q2 performance, which reflects the continued strength of our Subscription and SaaS portfolio and execution of our business model transition,” VMware Chief Financial Officer Karen Dykstra said in the company’s earnings release. “Subscription and SaaS ARR reached $5.31 billion to exit the quarter and grew 36% year-over-year, highlighting the momentum of our multicloud offerings.”

Broadcom’s acquisition of VMware was the subject of the latest weekly theCUBE Pod podcast featuring SiliconANGLE Media Inc.’s industry analysts John Furrier and Dave Vellante. In the podcast, Furrier and Vellante discuss how Broadcom’s acquisition of VMware is of pivotal importance and how Broadcom is going to remake the company:

Photo: Broadcom