Broadcom falls to $159M loss in 4Q

IRVINE, Calif. - Broadcom Corp. fell to a $159.2 million loss in the fourth quarter as the chip designer took big charges for an acquisition and a write-down in a division's value.

Sales topped Wall Street's forecast, but shares dropped 4 percent in extended trading as the Irvine, Calif.-based company revealed it is freezing salaries and cutting 200 workers, 3 percent of its staff.

Broadcom's first-quarter sales guidance of $800 million to $875 million fell short of Wall Street's forecast. Analysts surveyed by Thomson Reuters expected $953 million in sales.

Chip makers of all stripes are suffering amid the recession, which has dampened demand for PCs and other electronics that use semiconductors. For example, Intel Corp., the world's biggest semiconductor company, is cutting up to 6,000 jobs; Texas Instruments Inc., which makes chips for cell phones, is cutting 3,400 jobs.

Irvine, Calif.-based Broadcom, which makes chips for Internet networking gear and home-entertainment products like high-definition DVD players, said Thursday after that market closed that its loss translated to 32 cents per share.

A year ago, Broadcom posted a $90.3 million profit, or 16 cents per share.

The latest results were dragged down by 40 cents per share in one-time charges. One charge was for a write-down: Broadcom absorbed a $169.4 million impairment charge for the falling value of its mobile platforms business group, which makes chips for cell phones. Another charge was for its acquisition of Advanced Micro Devices Inc.'s digital-television chip business, which triggered a charge of $31.5 million for in-process research and development.

Broadcom spokesman Bill Blanning said the company earned 32 cents per share, when one-time items are stripped out. Analysts expected a more modest profit of 27 cents per share. Analyst estimates generally exclude one-time items.

Broadcom's sales rose 10 percent to $1.13 billion, besting analysts' forecast for $1.07 billion.

For all of 2008, Broadcom's profits edged up to $214.8 million, or 41 cents per share, from $213.3 million, or 37 cents per share. Sales jumped 23 percent to $4.66 billion.

Broadcom shares fell 73 cents, or 4.2 percent, to $16.70 in extended trading, after closing the regular session at $17.43.

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