Broadcom Ltd AVGO
Q2 2013 Earnings Call Transcript

Transcript Call Date 05/29/2013

Operator: Welcome to the Avago Technologies Limited Second Quarter Fiscal Year 2013 Financial Results Conference Call. At this time for opening remarks and introductions, I would like to turn the call over to Tom Krause, Vice President of Corporate Development. Please go ahead, sir.

Thomas Krause - VP, Corporate Development: Thank you, operator, and good afternoon, everyone. Joining me today are Hock Tan, President and CEO and Tony Maslowsk, Interim Chief Financial Officer of Avago Technologies.

After the market closed today, Avago distributed a press release and financial tables describing our financial performance for the second quarter fiscal year 2013. If you did not receive a copy, you may obtain the information from the Investors' section of Avago's website at 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 Investor Section of our website at

During the prepared comments section of this call, Hock and Tony will be providing details of our second quarter results, background to our Q3 2013, outlook and some commentary regarding the business environment. We will take questions after the end of our prepared comments.

In addition to U.S. GAAP reporting, Avago reports certain financial measures on a non-GAAP basis, a reconciliation between GAAP and non-GAAP measures is included in the tables attached on today's press release. Comments made during today's call will primarily refer to our non-GAAP financial results.

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.

At this time, I would like to turn the call over to Hock. Hock?

Hock E. Tan - President and CEO: Thank you, Tom. Good afternoon, everyone. We are going to start today by reviewing recent end market business highlights and then Tony will provide summary of the second quarter fiscal 2013 financial results.

Now, revenue for Q2 fiscal year was $562 million, which was at the upper end of our guidance. This represented a decline of 2% from last quarter, and a decrease of 2% from the same quarter a year ago.

Here Wireless revenue declined 9% sequentially in line with our guidance. As we expected, the negative revenue impact from a major U.S. smartphone product transition was partially offset by new platform launches at certain other OEM customers.

Wired revenue was up as we expected. Surprisingly, Industrial was also up slightly and above expectations, thanks to slow but steady improvement in the industrial end market demand.

Let me now provide more color on each of our targeted markets, starting with Wireless. Revenue from Wireless was essentially in line with our expectation, declining 9% sequentially during Q2. Wireless represented 50% of total revenues. A significant product transition at our largest North American smartphone OEM was the primary reason for the Q2 sequential decline.

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