Broadcom Limited (NASDAQ:AVGO) Q1 2019 Earnings Conference Call Transcript

Mar 14, 2019 • 05:00 pm ET

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Broadcom Limited (NASDAQ:AVGO) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, welcome to Broadcom Inc.'s First Quarter Fiscal Year 2019 Financial Results Conference Call. At this time, for opening remarks and introductions, I would like to turn the call over to Beatrice Russotto, Director of Investor Relations of Broadcom, Inc. Please go ahead, ma'am.

Executive
Beatrice Russotto

Thank you, operator, and good afternoon, everyone. Joining me today are Hock Tan, President and CEO; and Tom Krause, Chief Financial Officer of Broadcom. After the market closed today, Broadcom distributed a press release and financial tables describing our financial performance for the first quarter of fiscal year 2019. If you did not receive a copy, you may obtain the information from the Investors section of Broadcom's website at broadcom.com. This conference call is being webcast live and a recording will be available via telephone playback for one week. It will also be archived in the Investors section of our website at broadcom.com.

During the prepared comments section of this call, Hock and Tom will be providing details of our first quarter fiscal year 2019 results, guidance for fiscal year 2019 and commentary regarding the business environment. We'll take questions after the end of the prepared comments. Please refer to our press release today and our recent filings with the SEC for information on the specific risk factors that could cause our actual results to differ materially from the forward-looking statements made on this call. In addition to US GAAP reporting, Broadcom reports certain financial measures on a non-GAAP basis. A reconciliation between GAAP and non-GAAP measures is included in the tables attached to today's press release. Comments made during today's call will primarily refer to our non-GAAP financial results.

So with that, I will turn the call over to Hock.

Executive
Hock E. Tan

Thank you, Bea, and thank you everyone for joining us today. So, we had a good start to fiscal 2019, growing 9% in our first fiscal quarter compared to the same period a year ago. The strength of our business model delivered another quarter of sustain revenues, strong earnings and then extremely strong free cash flow.

Our semiconductor business held up relatively well. Not surprisingly, our wireless business was down sharply and our storage business underperformed somewhat. However, these challenges were mitigated -- more than mitigated by our networking business, which grew double-digits year-over-year. In addition, we were very pleased to see that the broadband business have started to recover and stabilize in the quarter. In fact, putting in altogether, the semiconductor segment was actually up year-over-year in the first quarter, if you exclude the expected sharp decline in wireless.

Turning to infrastructure, this business, which include SAN switching, mainframe and enterprise software, delivered solid top-line results, benefiting from a very robust enterprise spending environment. The integration of CA onto the Broadcom platform is very well underway and we are confident that we can meet if not exceed in the long term and exceed the long-term revenue and profitability targets that we laid out for CA to you last year. In fact,