In the quarter ending March 2009 (Q1), Broadcom reported earnings per share of $0.08 significantly better than the analysts’ consensus estimate of $0.025 by $0.055 or 220%. Revenue of $853 million in the first quarter represented a decline of 24% sequentially and 17% year-over-year. On a peak-to-trough basis, this represents a 34% decline from the company’s peak revenue in Q3 2008. Analysts’ estimates for the quarter ending June 2009 (Q2) range from a low of $0.1 to a high of $0.489, with a consensus of $0.236.

For the quarter ended June 2009, the consensus EPS forecast has remained the same over the past week at $0.236 and increased over the past month from $0.210 to $0.236 (12.38%). Of the 28 analysts making quarterly forecasts, 7 raised and none lowered their forecast.  The second quarter results should have benefited from improving business conditions as the company experienced more customer-requested expedites than it did cancellations in the last few weeks of the quarter. Broadcom also experienced increased activity in DTV and consumer electronics as companies prepared new products for the holiday season.

The company is expected to report Q2 revenue in the range of $900 million to $975 million. In the second quarter, the company is expected to have benefited from: 1) continued expansion of pay-TV and Internet access services internationally, 2) significant growth in China for cable and India for satellite and must have optimized low-cost solutions in both countries, 3) market share gains and strong demand for DSL products in the China, 4) increased adoption in handheld portable devices, 5) revenue and units for Triple-Play parts incorporating wireless LAN expected to have doubled sequentially, and 6) increase sales of EDGE and 3G chips. However, the company’s enterprise networking business should posted declines in the second quarter.

Overall GAAP gross margin should have improved by roughly 25 basis points to 50 basis points off of the 46.5% seen in Q1 excluding Verizon. This is driven by a benefit to overhead absorption, partially offset by mix and anticipated E&O level. Typically, E&O reserve as a percentage of total inventory peak about one quarter after the trough.

Recently, the company announced that it dropped its efforts to acquire Emulex Corporation (NYSE: ). This is a positive development given the given the hostile tone of the take-over, and the doubts regarding strategic fit. However, the absence of Emulex, however, makes gross margin pressure more likely should Broadcom's baseband ramp prove successful in 2010.

For the year ending December 2009, the consensus EPS forecast has increased over the past week from $0.738 to $0.753 (2.03%) and increased over the past month from $0.681 to $0.753 (10.57%). Of the 28 analysts making yearly forecasts, 10 raised and 1 lowered their forecast. Currently, the stock is trading at $28.62 (25x 2010 consensus EPS), compared to the 52 week range of $12.98-$28.80. The stock looks like setting a new 52 week high soon.