Broadcom (AVGO) to Report Q3 Earnings: What's in the Cards?
Broadcom AVGO is set to report its third-quarter fiscal 2023 results on Aug 31.
For the quarter, Broadcom expects revenues of roughly $8.85 billion, up 16% year over year.
The Zacks Consensus Estimate for revenues currently stands at $8.86 billion, suggesting growth of 4.64% from the year-ago quarter’s reported figure.
The consensus mark for earnings has remained steady at $10.42 per share over the past 30 days, indicating 7.09% growth from the figure reported in the year-ago quarter.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average earnings surprise being 1.61%.
Broadcom Inc. Price and EPS Surprise
Broadcom Inc. price-eps-surprise | Broadcom Inc. Quote
Let’s see how things have shaped up for Broadcom prior to this announcement:
Factors to Consider
Broadcom’s top-line growth is expected to have benefited from strong demand for its networking solutions, which include Tomahawk 4 and Jericho switches. Strong adoption of these due to the rapid adoption of generative AI is expected to have driven networking top-line growth in the to-be-reported quarter.
Broadcom expects revenues related to generative AI to exceed $1 billion in the fiscal third quarter. It expects networking revenues to grow roughly 20% on a year-over-year basis.
However, moderate enterprise demand for storage adapters is expected to have hurt storage connectivity revenues, which Broadcom expects to grow at a low single-digit rate on a year-over-year basis.
Continued adoption of Wi-Fi 6 and Wi-Fi 6E for access gateways, courtesy of solid demand from homes, enterprises, telecommunication companies and other service providers, is expected to have contributed to revenue growth across the broadband end market in the fiscal third quarter.
However, moderate spending by telecommunication companies is expected to have hurt 5G deployments in the to-be-reported quarter.
What Our Model Indicates
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Broadcom has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
American Eagle Outfitters AEO has an Earnings ESP of +8.52% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters is set to release its second-quarter 2023 results on Sep 6. AEO shares have gained 13.3% year to date.
Patterson Companies PDCO currently has an Earnings ESP of +5.66% and a Zacks Rank #2.
PDCO shares have returned 20% year to date. Patterson Companies is set to report its first-quarter fiscal 2024 results on Aug 30.
Five Below FIVE has an Earnings ESP of +1.21% and a Zacks Rank #2.
FIVE shares have gained 0.5% year to date. Five Below is set to report its second-quarter fiscal 2023 results on Aug 30.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
Patterson Companies, Inc. (PDCO) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Five Below, Inc. (FIVE) : Free Stock Analysis Report
