Shares of Broadcom Inc. traded higher after-hours on Thursday after it released a positive second-quarter revenue outlook.
The American semiconductor company jumped 2.49% or 14.40 points to $593.00 per share. It reversed its drop of 1.23% or 7.18 points to $578.60 per share.
In line with this, the firm received an additional $5.89 billion to its market capitalization.
Broadcom anticipated the current quarter to post revenue of $7.90 billion. The projection came in higher than the analysts’ average estimate of $7.43 billion.
The positive outlook benefitted on the strong demand from enterprise and cloud clients, and the ramp-up in 5G technology.
Broadcom CEO Hock Tan noted that enterprise spending recovered strongly from a slump in the first quarter of last year.
Subsequently, the firm’s hardware had an order backlog of over $25.00 billion at the end of the quarter.
This record is beyond the previous $22.00 billion, painting a picture for continued solid demand this year.
Moreover, Broadcom also positioned itself to gain from the global rollout of 5G wireless technology.
It expects a boost in demand for its chips used in handsets, telecom equipment and other devices.
Accordingly, the company also reported financial results for its first quarter of the fiscal year 2022, ending January 30.
The global technology leader released a Q1 adjusted revenue of $7.71 billion. The number slightly edged up than the market consensus of $7.60 billion.
At the same time, it represented a 16.00 % year-on-year increase from the last $6.66 billion.
Eventually, the business earned $8.39 per share, outpacing the analysts’ expectation of $8.08. It also significantly climbed from the past $6.61 result.
Broadcom posts gain in chip sales
Furthermore, Broadcom’s chip sales strengthened 20.00% to $5.87 billion from the year-ago period. The segment also surpassed the forecasted $5.75 billion.
Similarly, the California-based company reported a 5.00% YoY rise to $1.83 billion in infrastructure software sales.
However, the unit came in lower than the anticipated result of $1.85 billion.
Then, it cited the spending of $2.70 billion on share buybacks during the quarter, lower than the previous $10.00 billion in Q4.
Still, Broadcom explained that its record first-quarter results benefited from the continued investments in next-generation technology.
Before the extended trading, Broadcom’s stock price had lost 12.77% or 84.72 points since the start of the year. Nevertheless, it has gained 30.44% or 135.01 points over the past 12 months.