Broadcom Inc (NASDAQ: AVGO) stock fell over 1.3% on 11th December, 2020 (as of 10:56 am GMT-5; Source: Google finance) after the company posted lower than expected results for the fourth quarter of FY 20.
Semiconductor solutions revenue rose 6% year-on-year to $4.8 billion and represented 75% of the total revenue this quarter. Revenue for the Infrastructure Software segment rose 36% year-on-year to $1.6 billion and represented 25% of revenue, including Symantec. The company delivered gross margins of 74% of revenue in the quarter, which is up approximately 370 basis points year-on-year. The expansion and gross margin year-on-year was due to favorable product mix and semiconductors and a higher percentage of software revenue. Gross margins for the Semiconductor Solutions segment were approximately 68% in Q4 of 320 basis points year-over-year. The Gross margins for the Infrastructure Software segment were 90% in Q4, which represents an expansion of 130 basis points year-over-year. The company generated 36% increase in quarterly free cash flow to $3.2 billion representing 50% of revenue. Overall, the company ended the fourth quarter with $7.6 billion of cash, and currently have $12.6 billion of liquidity including the $5 billion revolver. AVGO ended the quarter with $41.1 billion of total debt of which approximately $800 million is short-term. During the fourth fiscal quarter, the Company generated $3,348 million in cash from operations and incurred $102 million on capital expenditures.
AVGO in the fourth quarter of FY 20 has reported the adjusted earnings per share of $6.35, while reported the adjusted revenue growth of 12 percent to $6.47 billion in the fourth quarter of FY 20.
Additionally, the company paid the common stockholders $1.3 billion of cash dividends. On September 30, 2020, the Company paid a cash dividend of $3.25 per share of common stock and a cash dividend of $20.00 per share of mandatory convertible preferred stock, totaling $75 million. The company also paid $185 million in withholding taxes due on vesting of employee equity, resulting in the elimination of approximately 500,000 AVGO shares. The company plans to increase the target quarterly common stock cash dividend starting this quarter, to $3.60 per share.
The company projects first quarter 2021 revenue to be of approximately $6.6 billion; and first quarter 2021 Adjusted EBITDA to be of approximately $3.9 billion, or 59 percent of projected revenue.