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Broadcom Shares Fall 7% After Earnings-Estimate Cut

February 14, 2001|Bloomberg News

Broadcom Corp.'s stock retreated Tuesday after Credit Suisse First Boston Corp. cut its estimate of the Irvine chip maker's full-year earnings, citing slowing growth and excess semiconductor inventories.

Broadcom shares fell $5.50, or 7%, to $74.94 a share in Nasdaq trading. The stock, which traded as high as $274.75 in August, has lost about 11% of its value so far this year.

Credit Suisse analyst Charles Glavin, in a report, lowered his rating on the company's shares to "hold" from "buy." He cut his estimate of Broadcom's 2001 earnings to $1.30 a share from $1.55 and revenue to $1.96 billion from $2.25 billion. Those estimates could fall even further, Glavin said.

Glavin also based his downgrade on a looming price war, acquisition costs and the effects of efforts to woo customers.

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