Communications chip vendor Broadcom Corp. has cut its sales forecast for the third quarter after an inventory glut led customers to ask it to delay some shipments of ordered goods.
It now expects revenue for the three months to September 30 to be flat to slightly up on the $641 million recorded in the previous quarter, compared with its previous guidance that revenue would show a four to six percent sequential improvement to a range of $673 million to $680 million.
Irvine, California-based Broadcom said the revised figure would still represent a 50% increase over revenue a year earlier and gross margin is expected to be in line with previous guidance of flat to slightly down on the previous three months.
The stock market was cheered by CEO Lanny Ross’s belief that the correction would be short-term in nature and Broadcom’s stock rose 10.9% to $30.72 on the news.
Broadcom said areas of particular weakness included satellite and set-top box applications and cellular handsets, particularly for the Chinese market. Areas of strength were wireless LAN and Bluetooth applications.