(ticker: AVGO) shares are trading much lower in late trading after the chip maker has reduced their guidance for the fiscal year 2019, and a warning that demand is falling as a result of global trade tensions. Broadcom has apparently felt the effect of the American breakdown on Huawei, one of the company's largest customers.
from 17.00 on Thursday, the stock was down 6.9% in the after-trade, to $ 262.20.
Hock Tan, CEO of Broadcom, said in a statement that the company "performed according to plan in the second quarter" with tailwinds from the network to compensate for expected headwinds from wireless. "
But he also warns that there are issues ahead.
For the entire fiscal year, Broadcom cut its revenue outlook to $ 22.5 billion, from $ 24.5 billion, and reduced its capital expenditure outlook to $ 500 million from $ 550 million. Million dollars.
"We are currently seeing a broad decline in the demand environment, which we believe is driven by continued geopolitical uncertainties, as well as the effect of export restrictions on one of our largest customers," said Tan, presumably about Huawei.
" As a result, our customers actively reduce inventory and we take a conservative stance for the rest of the year. "
is the company's largest single customer, accounting for about a quarter of Broadcom's revenue in fiscal 2018, according to its latest 10-k filing.
Broadcom said it still expects to grow free cash flow with a two-digit percentage for years.
For the fiscal second quarter ended May 5, Broadcom reported revenue of $ 5.5 billion, an increase of 10% from the previous year, but a decline of 4.7% from the first quarter and below the Street Consensus of 5, $ 69 billion. Non-GAAP profits of $ 5.21 a share beat Street consensus by three cents.
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