Conference Call Webcasted at 6:00 a.m. PT / 9:00 a.m. ET www.broadcom.com/investors
IRVINE, Calif., June 2, 2014 /PRNewswire/ — Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in semiconductor solutions for wired and wireless communications, today announced it is exploring strategic alternatives for its cellular baseband business, including a potential sale or wind-down. The company has engaged investment bank JP Morgan in connection with its efforts.
The successful sale or wind-down of the cellular baseband business is currently expected to result in a roughly $700 million reduction in annualized GAAP research and development and selling, general and administrative expenses, of which approximately $100 million relates to estimated reductions in stock-based compensation. As such, non-GAAP research and development and selling, general and administrative expenses are currently expected to be reduced by roughly $600 million. These estimates do not reflect the impact of any potential impairment and/or restructuring charges that are likely to be recorded related to the successful sale or wind-down of Broadcom’s cellular baseband business.
Chips are displayed at the headquarters of Broadcom Corp. in Irvine, California, U.S., on Friday, April 12, 2013. Broadcom’s chips provide the short-range wireless connectivity in products such as Apple Inc.’s iPhone and iPad and Samsung Electronics Co.’s Galaxy line of mobile devices.
Broadcom currently expects to organically reinvest roughly $50 million of these savings on an annualized basis into projects in the Broadband, Infrastructure and Connectivity businesses. This incremental spending is currently expected to strengthen and accelerate the company’s plans in the area of small cells, embedded processing and low-power connectivity.
Updated Business Outlook
Broadcom today also updated its business outlook for the three months ending June 30, 2014. Broadcom continues to expect revenue between $2.0 billion and $2.1 billion. Broadcom now expects both GAAP and non-GAAP product gross margin to be at or above the high end of the previously-guided range, driven principally by mix.
Conference Call Information
Broadcom will conduct a conference call with analysts and investors today at 6:00 a.m. PT (9:00 a.m. ET). Interested parties can call (800) 447-0521 US toll free or (847) 413-3238 US toll. The company will broadcast the conference call via webcast over the Internet. To listen to the webcast, please visit the Investors section of Broadcom’s website at www.broadcom.com/investors. The webcast will be recorded and available for replay, within 48 hours after the event, until 10:00 p.m. PT on July 2, 2014.
There can be no assurance that this exploration process will result in a sale. The company does not intend to discuss developments with respect to the exploration of strategic alternatives in cellular baseband unless or until its Board of Directors has approved a definitive transaction or the process is otherwise complete.
Official Press Release from Broadcom
Quoted from INVESTORS.com:
Intel (NASDAQ:INTC), looking to boost its wireless business, could acquire Broadcom or Broadcom’s wireless business, analysts have long speculated.