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Broadcom Posts Loss; Revenue Drops 33%

January 24, 2002|From Times Wires Services

Broadcom Corp., the Irvine communications chip maker, said Wednesday it posted a fourth-quarter loss on a 33% drop in revenue amid the slowdown in global technology spending. Its shares fell as much as 8.8% after the company forecast first-half sales below analysts' estimates.

Broadcom reported a net loss of $329.6 million, or $1.27 a share, compared with a net loss of $768.3million, or $3.28 a share, a year ago.

On a pro forma basis, which excludes items such as acquisition-related expenses and payroll taxes on certain stock option exercises, Broadcom's fourth-quarter loss was $28.8 million, or 11 cents a share, compared with a profit of $58 million, or 21 cents a share, a year ago.

The average estimate of 24 brokers surveyed by research firm Thomson Financial/First Call was for a pro forma loss of 12 cents per share.

Fourth-quarter revenue was $226.8 million, down 33% from the year-ago quarter, but up 6.2% from the third quarter of 2001.

The company said first-quarter revenue will rise 3% to 4% from the fourth quarter, and be in the "mid-single digits" in the second quarter. Both were below analysts' estimates of 5% for the first quarter, and 11% in the second.

Broadcom shares fell to $42.15 in after-hours trading, after a gain of 4.2%, or $1.83, to $45.38 in regular trading on Nasdaq.

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In other technology earnings Wednesday:

* Activision Inc., the Santa Monica video-game publisher, said fiscal third-quarter profit surged 91% thanks to a strong holiday season. The company posted a profit of $39.1 million, or 66 cents a share, up from a profit of $20.5 million, or 45 cents a share. That beat a First Call estimate of 58 cents. Sales in the period ended Dec. 31 rose 40%, to $371 million, from $264.5 million a year earlier.

The company also raised its financial estimates for the year ending March 31, saying it will probably post $765 million in revenue, up from previous guidance of $725million. The company's shares hit $27 in after-hours trading. It closed at $24.80 in regular Nasdaq trading. The results were announced after the market closed.

* BCE Inc., Canada's biggest telecommunications company, said its fourth-quarter loss widened as operating costs rose almost three times as fast as sales. The Montreal-based company's loss was $194.2 million, compared with a loss from continuing operations of $4.4 million a year earlier. BCE said it spent $248 million, mostly to cut jobs at its Bell Canada and Aliant phone units and to write down its analog cell-phone and paging networks. BCE also spent more to attract new customers for wireless and other services, pushing operating expenses up 23% to $2.41 billion.

* Corning Inc., the biggest maker of optical fiber, said its fourth-quarter loss widened dramatically on expenses for job cuts and inventory write-downs and a 53% plunge in sales. The loss grew to $655 million, or 69 cents a share, from $58 million, or 6 cents, in the year-earlier quarter. Sales fell to $974 million from $2.08 billion. The company said it may see "improved demand in the second half of this year," though it didn't give 2002 forecasts.

Excluding $799 million in pretax expenses for job cuts, plant write-downs, pretax acquisition costs and other items, Corning said it would have had a loss of $261 million, or 28 cents a share.

* EarthLink Inc., the third-biggest U.S. Internet service provider, said its first-quarter loss excluding some costs will be wider than expected. Excluding acquisition-related costs, Atlanta-based EarthLink said the loss will be 10 cents to 13 cents a share on sales of $340million. It was expected to lose 8 cents a share on sales of $347.8 million. EarthLink plans to increase its marketing spending by 10% to 20% this year to attract customers to its regular and high-speed Internet access. EarthLink said it lost 103,000 dial-up customers from a year ago, and that it would sign up as many as 300,000 high-speed Internet customers this year, less than forecast.

* LSI Logic Corp., the biggest maker of custom semiconductors, said it had a fourth-quarter loss on falling chip sales and restructuring and acquisition costs. The loss was $250.1 million, or 68 cents a share, compared with net income of $61.7million, or 18 cents, a year earlier, the Milpitas, Calif., company said. Sales fell 46% to $405.8 million from $750.6 million. LSI said it expects first-quarter sales of break even to 3% above the fourth quarter.

* SAP, the largest maker of business-management software, said fourth-quarter profit fell 13% on costs from an acquisition in the United States, but expects sales will rise strongly in 2002. Europe's biggest software maker earned $281 million in the three months through December versus $322million a year earlier. Sales rose 7% to $2 billion.

Profit would have risen but for costs stemming from its $400-million purchase of portal software maker Top Tier last year. Its results also were depressed by its share of losses at Commerce One Inc., a U.S. maker of software for Internet exchanges in which SAP has a stake of more than 20%. For 2002, SAP said revenue would grow 15% and said it would increase its profit margins, mostly in the second half of the year.

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