SINGAPUR (dpa-AFX) - Singapore-based chip maker Avago Technologies Ltd. (AVGO) said Thursday after the markets closed that its fourth quarter profit rose 3% from last year, as lower operating expenses offset a slight decline in revenue.
'Strong product ramps at major smartphone customers more than offset weakness in industrial and wired infrastructure, resulting in a 2% sequential revenue growth in the fourth quarter. Sequential revenue growth of 8% for our three primary target markets in the quarter was overshadowed by the anticipated $31 million decrease in revenue from our legacy consumer navigation products,' said Hock Tan, President and CEO of Avago Technologies.
Avago shares are currently losing 3.13% in after hours trading after closing the day's regular trading session at $35.10, up 54 cents or 1.56%. The stock trades in a 52-week range of $27.39 to $39.22.
The company's gross margin for the quarter shrank to 48.4% from 48.8% a year earlier, while adjusted gross margin narrowed to 51.1% from 51.2% last year.
However, operating expenses for the fourth quarter fell 7% to $135 million from $145 million in the fourth quarter of last year.
For the fourth quarter ended October 28, 2012, the company reported net income of $159 million or $0.64 per share, compared to $154 million or $0.61 per share for the year-ago quarter.
Excluding items, adjusted income for the fourth quarter was $194 million or $0.77 per share, compared to $186 million or $0.73 per share in the prior year quarter.
On average, 12 analysts polled by Thomson Reuters expected the company to earn $0.67 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Net revenue for the fourth quarter fell 1% to $618 million from $623 million in the same quarter last year. Nineteen analysts had a consensus revenue estimate of $615.15 million for the fourth quarter.
The company said it expects first quarter revenue to decline 5% to 9% sequentially, implying revenue of $562.38 million to $587.10 million. Analysts currently expect the company to post revenue of $606.38 million for the first quarter.
'Looking to the first fiscal quarter of 2013, however, we expect continued softness in wired infrastructure and continued supply chain contraction in industrial will result in a decrease in revenue,' said Avago CEO Hock Tan.
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