Broadcom (NASDAQ: AVGO) stock price breached $300 mark again following strong Q3 results. The stock price has 52-weeks trading range of $323 to $208. Previously, the stock has surpassed $300 level several times but it failed in sustaining the upside momentum.
Broadcom has beaten analysts’ earnings expectations for the third quarter while its revenue grew close to double-digit rate. Its net revenue of $5.5 billion increased 9% from the year-ago period. The revenue was flat compared to the previous quarter.
The company has generated significant improvement in gross margin. Its gross margin of $3 billion or 55% of net revenue increased substantially from 51.7% of net revenue in the year-ago quarter.
Its net income surged to $715 million, or $1.71 per diluted share. This compares with net income of $691 million, or $1.64 per diluted share.
“Our broad portfolio of mission critical semiconductor and infrastructure software solutions, utilized by the world’s largest enterprises, continued to drive sustained revenues and robust cash flow despite a challenging market backdrop,” said Hock Tan, President, and CEO of Broadcom Inc.
The company has also generated significant cash flows. Its free cash flow of $2.3 billion increased 8% from the previous year period. Its free cash flows are enough to cover dividend payments and share buybacks.
Its quarterly dividend payments stood around $1.1 billion in Q3. Broadcom has also been supporting its dividends, earnings and share price through share buybacks. It bought $1 billion of common stock in the latest quarter.
It expects to generate sustainable financial growth in the following quarter. The company expects full-year revenue in the range of $22.5 billion, higher from fiscal 2018 revenue of $20 billion. The revenue growth is likely driven by $17.5 billion from semiconductor solutions and $5 billion from infrastructure software.
Overall, Broadcom stock price continues to receive support from its robust product pipeline, strong financial numbers, and solid cash returns. Therefore, the stock price is set to generate steady upside momentum in the coming days.
