Hock Tan, CEO of Broadcom
Martin H. Simon | Bloomberg | Getty Images
Shares of chipmaker Broadcom fell by just over 8% on Thursday, after the company had lower revenues than expected in the second quarter of 2019, which ended May 5, and reduced revenue guidance.  Here are the key figures for the quarter:
- Earnings: $ 5.21 per share, except some items, against $ 5.16 per share as expected by analysts, according to Refinitiv.
- Revenue: [$ $ 5.52 billion, against $ 5.68 billion as expected by analysts, according to Refinitiv.
Broadcom's revenue increased by 1
Broadcom's largest business segment, semiconductor solutions, produced $ 4.09 billion in revenue, below the $ 4.18 billion FactSet consensus estimate. The Infrastructure Software segment, including contributions from the CA business Broadcom acquired in 2018, reported revenues of $ 1.41 billion, below the $ 1.37 billion FactSet estimate.
In recent weeks, other semiconductor companies have lowered their forecasts after the US government has made efforts to limit Huawei's ability to buy products from US companies. Piper Jaffray analysts Harsh Kumar and Matthew Farrell estimate that Huawei represents 3% of Broadcom's revenue of around $ 150 million a quarter in a note distributed to clients on May 24. Analysts lowered their full-year revenues and revenue estimates for Broadcom in the light of blacklisting, which was announced in mid-May.
Broadcom lowered its guidance for the entire 2019 fiscal year, saying it now expects to reach $ 22.50 billion in revenue during that period. Consensus among analysts asked by Refinitiv was $ 24.31 billion in revenue for the 2019 fiscal year. In the previous quarter, Broadcom had managed $ 24.50 billion in full-year revenue.
"We are currently seeing a broad decline in the demand environment, which we believe is driven by continued geopolitical uncertainty, as well as the effect of export restrictions on one of our largest customers. As a result, our customers actively reduce inventory levels and we a conservative stance for the rest of the year, "said Broadcom CEO Hock Tan in Thursday's statement.
Tan elaborated on Thursday's conference call with analysts and notes that while last year, Broadcom received around $ 900 million in revenue from Huawei, the issues go beyond the dependence of one company.
"Basic compression of Supply Chain is what drives this reduction more than anything else, and it's broadly based," he said.
The Broadcom share has risen 10% since the beginning of 2019.
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