Broadcom meets diminished expectations

Broadcom reported first-quarter earnings that met lowered expectations, but also logged greater losses reflecting that its business is not immune to the overall telecommunications downturn.

The cable modem chipmaker reported pro forma earnings of 9 cents a share on revenue of $318 million, compared to earnings of 18 cents and revenue of $318 million for last year?s quarter.

The Irvine, Calif.-based company met analysts' expectations. Wall Street expected the company to make 9 cents a share, the consensus estimate of 19 analysts surveyed by First Call.

In a First Call survey analysts predicted Broadcom would reach $339 million in sales, but the company met its own reduced forecasts of a range between $315 million and $325 million that it announced previously.

Including charges from acquisitions, warrants and settlements, the company posted a loss of $1.43 a share versus a profit of 15 cents a year ago.

Broadcom first announced it was feeling the slowdown in the tech sector in February, then gave more specific earnings estimates in March.

For the past few months, it has been no secret that the reduced spending by telecommunications equipment makers has hurt the sector.

Internet equipment maker Cisco Systems warned Monday that earnings and revenue would not meet third-quarter expectations, and added that it would write off $2.5 billion in stocked-up inventory, mostly comprised of components. Broadcom sells chips to Cisco.

The company also gave investors few hopes of a turnaround since the company has received no signs of increased buying from customers.

"Looking ahead, as a result of the continued weakness in the communications sector, we have not yet seen improvement in order visibility from customers,? said Henry Nicholas, the company's CEO in a statement.