The Dysfunctional Triangle of Intel, Broadcom and Qualcomm

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    Dysfunctional indeed – now that’s a takeover 🙂


    Well so much for that…

    US President Trump blocks Singapore-based Broadcom’s takeover of US chipmaker Qualcomm
    On national security grounds
    Trump issues Presidential Decree


    Broadcom most likely will keep going after companies given their past strategy. Most analysts assume Broadcom will walk away from the Qualcomm deal and move on to
    the next target. The chatter is San Jose-based Xilinx Inc $XLNX. and Israel’s Mellanox Technologies Ltd $MLNX as next targets.


    Being in computer field, SnapDragon CPUs use far less power than INTEL/AMD and are super-fast as well. They are a worthy competitor to INTEL & AMD & Motorola 🙂


    While deal would have been OK when looking at multi-national CORPs in part — there is a new sheriff in town 😉 :woohoo:


    Broadcom Limited $AVGO reported impressive first-quarter fiscal 2018 Earnings & Confirmed Ending $QCOM bid

    Earnings of $5.12 per share beat the consensus by 8 cents, up 41% from the year-ago quarter and 11.5% sequentially.

    Non-GAAP revenues from continuing operations were $5.33 billion, up 28% from the year-ago quarter and 10% on a sequential basis, higher than consensus estimate of $5.25 billion.

    $AVGO raised quarterly interim cash dividend of $1.75 per ordinary share, payable on Mar 29, 2018.

    Wired Infrastructure revenues (35% of total revenues) were $1.88 billion, down 10% from the year-ago quarter and 13% sequentially. The decline was primarily due to seasonal weakness in demand for broadband access and set-top box products. Broadcom said demand for optical products from access and metro networks hurt profits whereas demand for data centers and cloud shipments were strong in the quarter.

    Wireless Communications (41% of total revenues) were up 88% year over year and 23% quarter over quarter to roughly $2.21 billion. Strong growth from ramp-up in shipments of next-generation platform from the company’s large North American smartphone customers.

    Enterprise Storage (19% of total revenues) rose 40% from the year-ago quarter and 54% sequentially to $991 million. The increase came from the contribution from acquired Brocade Fibre Channel switch business.

    Industrial & other (5% of total revenues) were up 40% year over year but declined 2% sequentially to $251 million. Driven by a significant increase in IP licensing revenues. Industrial resale continued to grow at a double-digit rate.

    Operating margin expanded 470 bps from the year-ago quarter and 90 bps from the previous quarter to 48.2%.

    As of Feb 4, 2018, cash & cash equivalents were $7.1 billion compared with $11.2 billion in the previous quarter. Long-term debt was $17.5 billion at the end of the first quarter, up slightly $17.4 billion from the previous quarter.

    Broadcom generated cash flow from operations of roughly $1.7 billion, down $2 billion from the prior quarter.
    Capital expenditures were $220 million, down from $233 million in the previous quarter.

    Source: Broadcom



    Early in the first quarter, Broadcom completed the long-delayed Brocade acquisition. It completed the divestiture of Brocade’s campus WiFi and switch business to Arris for 800 million in cash. $AVGOt sold Brocade’s headquarter building in Santa Clara for approximately 225 million in cash.


    Qualcomm Inc.

    With Trump telling $QCOM to immediately and permanently abandon its proposed takeover by Broadcom on grounds of national security concern the presidential order put an end to the tech deal on grounds of national security.

    The deal would have affected United States’ leading position in creating technology and setting standards for next-generation mobile phone communications as China is steadily taking a lead in the space.

    Recently, the U.S. Committee on Foreign Investment in the United States (CFIUS) investigated and reviewed Broadcom’s proposed $117 billion hostile takeover offer for Qualcomm


    Broadcom Ltd NASDAQ: $AVGO · March 16, 4:00 PM EDT
    254.67 ▼ 13.14 (4.91%)


    Merrill Lynch analysts add $QCOM to their US 1 List with price target for the stock is $75

    We are adding Qualcomm to the US 1 list as we see significant upside potential from the NXP acquisition and licensing renegotiations. Recent changes on the board may also signal more significant shifts in restructuring, licensing, or M&A strategy to come. Risks are related to Apple/Huawei licensing payments and trade relations with China, but we reiterate our positive stance.


    Broadcom $AVGO resumed in coverage at Barclays with a $335 target price – has a 52-week range of $208.44 to $285.68.
    The stock closed Friday at $242.48

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