Avago Technologies Ltd. (AVGO) on Thursday reported a swing to third-quarter loss even as revenues almost doubled, as the Singapore-based chip maker hurt by higher research costs and restructuring charges as well as asset write-downs. Nonetheless, the company's adjusted earnings trumped analysts' expectations, as did revenues.
Avago reported a third-quarter loss of $164 million or $0.65 per share, compared to last year's profit of $142 million or $0.56 per share.
Excluding items, adjusted earnings improved to $1.26 per share from $0.74 per share last year. On average, seventeen analysts polled by Thomson Reuters expected earnings of $1.06 per share for the quarter. Analysts' estimates typically exclude special items.
Research and development expenses for the quarter increased to $240 million from $101 million a year ago. The company recorded amortization of intangible assets of $91 million for the quarter, while restructuring charges were $87 million.
Net revenue in the third quarter soared 97 percent to $1.27 billion from $644 million a year ago. Adjusted revenues, including discontinued operations, were $1.39 billion. Nineteen analysts had a consensus revenue estimate of $1.35 billion for the quarter.
In the previous quarter, Avago completed its $6.6 billion acquisition of chip maker LSI Corp. In the latest third quarter results, Avago has classified the flash and Axxia businesses that were acquired from LSI as discontinued operations to reflect the agreed sale of those businesses to Seagate Technology and Intel Corp, respectively.
Gross margin for the quarter dropped to 31 percent from 47 percent last year, while adjusted gross margin improved to 57 percent from 51 percent last year.
Looking forward to the fourth quarter, the company expect revenues to be up 18 to 22 percent.
AVGO closed Thursday's trading at $76.36, up $0.20 or 0.26%, on the Nasdaq. The stock further gained $2.19 or 2.87% in after-hours trade.
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