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Broadcom quarterly net income spikes due to tax benefits

Broadcom Ltd. recorded a year-over-year surge in first-quarter net income attributable to ordinary shares on a GAAP basis, due to provisional income tax benefits from the new U.S. tax law.

Net income came in at $6.23 billion, up from $239 million. Earnings per share for the quarter were $14.62, a jump from 57 cents in the year-ago quarter.

On a non-GAAP basis, net income was $2.35 billion, up from $1.63 billion in the first quarter of 2017. EPS for the quarter on a non-GAAP basis was $5.12, up from $3.63 in the prior-year quarter.

Net revenue for the quarter improved by 10% to $5.33 billion, from $4.14 billion in the prior-year quarter. Operating income was $943 million.

Broadcom also announced an interim dividend of $1.75 per share. The record date for the dividend is March 22 and it will be paid out March 29.

The company expects net revenue of about $5 billion on both GAAP and non-GAAP bases.

Broadcom President and CEO Hock Tan was pleased with the results in the first quarter and expects the trend to continue.

"In the second quarter, we expect to sustain top-line momentum with strong data center demand for our networking and enterprise storage products, and a seasonal recovery in broadband access, to offset a sharp seasonal decline in wireless. Importantly, we expect gross margin to expand and drive free cash flow above our long-term target of 40% of revenue," Tan said.