UPDATE: Broadcom 4Q Net Slips 4.5% As Sales Ease; Dividend Lifted 11%

Broadcom Corp. (BRCM) reported better-than-expected fourth-quarter revenue and provided strong sales guidance for the current period, likely benefiting from its exposure to Apple Inc. (AAPL) and helping to alleviate some fears about mobile-market weakness.

The provider of chips for set-top boxes, networking and smartphones projected first-quarter revenue of $1.7 billion to $1.8 billion, compared with analysts' expectations for $1.73 billion, according to Thomson Reuters.

"For Q1 we are feeling pretty good about the fact we are better than seasonal," Chief Financial Officer Eric Brandt said during a conference call. "We're growing in the right places...and can see pretty good strength in our business."

The company also said it will boost its quarterly dividend by 11% to 10 cents a share, signaling its desire to satisfy investors during a challenging time for the broader semiconductor sector.

Shares, down 24% over the past 12 months through Tuesday's close, rose 2.2% to $35.12 in after-hours trading.

The Irvine, Calif., company has benefited from its exposure to iPhone maker Apple and competing smartphone maker Samsung Electronics Co. (005930.SE, SSNHY). But its overall results have been hurt in recent periods by weakness at Nokia Corp. (NOK) and other major handset customers. The company in October had warned about mobile weakness but later boosted its guidance on better-than-anticipated conditions.

Other mobile chip makers, predominantly those with lower exposure to Apple, have made comments in recent weeks about weakness in handsets. Flash memory maker SanDisk Corp. (SNDK) last week provided soft guidance on lower demand from mobile customers, and smartphone chip maker Marvell Technology Group Inc. (MRVL) lowered its view for the current period in part because of phone softness.

Broadcom Chief Executive Scott McGregor on Tuesday said mobile and wireless revenue was down 7% sequentially in the fourth quarter and should slide again in the current period.

But he blamed the softness on declines in the older 2G business and video processor weakness. McGregor said 3G processors and semiconductors that combine various connectivity functions--such as WiFi--on one chip are strong.

McGregor said the 2G business should eventually fall off and be mostly replaced by 3G.

"We should start to see a shift from headwinds to tailwinds [in wireless chips] in the latter part of this year," he said.

Along with its focus on the mobile market, Broadcom has also moved to equip itself for future demand with a $3.7 billion offer for NetLogic Microsystems Inc. (NETL), a maker of network-focused processors, and its own line of high-bandwidth WiFi devices.

Networking revenue was down 13% sequentially in the fourth quarter and should be roughly flat in the current period.

For the fourth quarter, Broadcom posted a profit of $254 million, or 45 cents a share, down from $266 million, or 47 cents a share, a year earlier. Excluding stock-based compensations, settlement costs and other items, earnings fell to 68 cents from 83 cents. Analysts were expecting 65 cents.

Revenue slipped 6.4% to $1.82 billion. The company's most recent December forecast called for about $1.8 billion.

Gross product margin edged down to 49.3% from 49.4%.

-By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com

--Drew FitzGerald contributed to this report.

Netlogic Microsystems (NASDAQ:NETL)
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