Broadcom Corp., announced its second-quarter profit nearly quadrupled, beating Wall Street’s expectations. It’s feared, even as revenues rise, that the company’s profits margins will slip in the third quarter.
The Irvine, Calif.-based company is in a healthy market, as rising online traffic and demand for Internet video are driving demand for Broadcom’s chips, which are used in cable set-top boxes, communications equipment and home networking gear.
The Irvine’s demand for Internet video are driving demand for Broadcom’s chips, which was reflected in Broadcom’s second-quarter net income of $134.8 million, or 25 cents per share, a dramatic improvement over the $34.3 million, or 6 cents a share, that Broadcom made in the year-ago period.
On a conference call with analysts, executives cautioned that Broadcom’s gross profit margin would likely decline in the third quarter. That overshadowed upbeat sales guidance of $1.25 billion to $1.30 billion.
Broadcom’s sales were higher than expected. Broadcom had $1.2 billion in revenue in the three months ended June 30, a 34 percent increase over last year’s $897.9 million, and about $100 million above analyst estimates.
Sony Ericsson’s second quarter net profit has tumbled down from US$374.77million (£174m) last year to just US$9.39million (£4.7m) for the same period this year.
According to the manufacturer, 2,000 jobs will be slashed worldwide, a part of the plans to cut operating costs by US$475.67 million (£238m) a year. The job cuts will be made within the next 12 months.
Prices of Sony Ericsson handsets dropped during the period from £99 to £92 due to the impact of a greater proportion of lower priced phones in the product portfolio, as well as increased price competition in the market for mid- to high-end phones.
Sony Ericsson’s Q2 sales fell from £2.47bn last year to £2.23bn although handset volumes remained relatively steady, down by just 500,000 from 24.9 million last year.
Sony Ericsson’s operating income dropped from £250m to a loss of £1.58m during the same period partly due to higher research and development investments as a percentage of sales.
The company also said that it expects ‘challenging market conditions’ for the remainder of the year and issued a specific warning about the third quarter.
Sony Ericsson’s market share for the second quarter is estimated to be around 8%.
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Eesti Telekom, has reported its Q2′08 financial results revealing a net profit of USD10.3 million (EUR6.5 million), a 6.4% fall from June 2007.
Revenues fell to USD158 million (EUR100.1 million), as a result of the reduction in interconnection fees by the state regulator in November 2007.
Eesti also indicated that slowing sales of telecoms equipment had impacted revenues, with the operator also confirming it is to continue its strategy of reducing personnel to cut operating costs. Wireless subscriber figures show a rise from last year, up to 755,000.
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Etihad Etisalat (Mobily) announced second half net profits of US$206.42million (SAR 774 million), up 40% over last year’s results of US$ 147.78million (SAR 554 million) over the same period.
Revenues grew by 24% from US$ 1.04billion (SAR3.906 billion) in the second half of 2007 to US$1.29 billion (SAR 4.851 billion) for second half results of this year.
The operational profit grew from US$213.4 million (SAR 800 million) at the end of the second half of 2007 to US$ 257.15million (SAR 964 million) for the second half of 2008, presenting a 21% growth.
Net profits grew 47% from SAR 304 million for Q2 2007 to SAR 448 million for the second quarter of this year, resulting in earnings per share growth from SAR 0.6 to SAR 0.91 over the period.
Revenues rose 25% across the period to SAR 2.544 billion for Q2 of this year, as compared to SAR 2.029 billion for 2007 second quarter results.
Operational profit grew from SAR 429 million in Q2 2007 to SAR 530 million for the second quarter of 2008, presenting a 24% growth.
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Broadcom’s Q2 profit quadruples (US)
