Despite meeting or exceeding Wall Street targets, Broadcom shares dropped nearly 10% to $37.86 in after-hours trading on the Nasdaq.
The company’s profit fell to $27.8m, or 5 cents a share, from $110.1m, or 19 cents, a year ago.
Excluding stock option compensation and other expenses, the company’s profits would have been 27 cents a share, which met analysts’ average forecasts.
Revenue, however, surpassed analysts’ targets. Irvine, California-based Broadcom had sales of $950m for the quarter, about $20m more than Wall Street forecasts and 5% greater than revenue a year ago.
Broadcom chief executive Scott McGregor said the company would continue to invest aggressively in research and development of products for the cellular handset market in the current fourth quarter.
