Meanwhile, graphics chipmaker 3Dfx's stock price slumped today after posting record revenues but only marginally better earnings over the same period a year ago.
Irvine, Calif.-based Broadcom's stock jumped $25.50 to $155 in afternoon trading on the Nasdaq stock market after posting the surprisingly strong earnings. The stock gained 19.69 percent today after a 7.7 percent gain yesterday.
Broadcom reported record earnings of $12.8 million, or 26 cents a share, up from $2.5 million, or 6 cents a share, in the same period a year ago. Consensus analyst estimates were forecasting 20 cents a share, according to First Call.
Revenues rose 75 percent from fiscal fourth quarter 1997 levels to $70.1 million, which the company attributed to faster than anticipated equipment upgrades in the cable TV industry.
"Basically [Broadcom] has a significant share of the digital set- top box market. And apparently the rollout of these boxes is way ahead of schedule," he said.
Digital cable service, which is characterized by more channels and better picture reception, has been a hit with cable customers, translating into a need for newer digital set-top boxes to receive the signals.
Broadcom said next month it plans to execute a two-for-one stock split on Class A shares.
On Monday, Broadcom said it was buying Maverick Networks, a San Jose, California-based firm with inexpensive network switching technology, for $111.9 million in stock.
3Dfx yesterday trumpeted record revenues for the fourth quarter of 1998 of $60,743,000, an increase of 63 percent from the year ago fourth quarter total revenues of $22,297,000.
Earnings didn't fare nearly as well in a year marked by intense competition in the market for graphics chips. 3Dfx registered fourth quarter net income of $2,091,000, or $.13 per diluted share. This compares with net income of $2,072,000, or $.15 per diluted share in the fourth quarter of 1997.
Still, yearly results showed a profit of $1.33 per diluted share, as compared to a net loss of 16 cents per diluted share in 1997.
Bloomberg contributed to this report.