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Tech Industry

Rambus on target, Broadcom delivers upside surprise

    Chip makers Rambus and Broadcom issued solid results Tuesday in their most recent quarters.

    Rambus met analysts' estimates in its third quarter Tuesday, earning $4.8 million, or 4 cents a share, on sales of $17.8 million.

    First Call Corp. consensus pegged the chipmaker for a profit of 4 cents a share in the quarter.

    Rambus (Nasdaq: RMBS) shares closed off 6 5/8 to 101 7/8 ahead of the earnings report. In after-hours trading, the stock slipped to 94 3/8.

    The $17.8 million in sales marks a 67 percent improvement from the year-ago quarter when it earned $2 million, or 2 cents a share, on sales of $10.6 million.

    Company officials said the third-quarter sales included $6.6 million in royalties from licensees for their shipments of Rambus ICs. The figure also includes $3.7 million of deferred revenue from canceled contracts.

    Last quarter, Rambus pocketed $4.9 million, or 15 cents a share, on sales of $15.7 million.

    Its shares soared up to a 52-week high of 127 in June ahead of its 4-for-1 stock split. The stock fell to a low of 14 5/8 in September.

    Broadband chip maker Broadcom (Nasdaq: BRCM) easily hurdled estimates Tuesday with earnings of $57.4 million, or 23 cents a share, on sales of $245.2 million.

    Earnings tracking firm First Call Corp. predicted earnings of 19 cents a share. Including charges, Broadcom reported earnings of $55.9 million, or 22 cents a share.

    During the quarter, Broadcom completed the acquisition of Pivotal Technologies. The company also bought Innovent Systems, which is expected to close in the third fiscal quarter and will be recorded using the purchase method of accounting.

    "We experienced strong demand in all of the markets we serve, with better than expected growth in the broadband transmission markets for digital set-top boxes and cable modems," said Henry T. Nicholas, CEO, in a statement. "We also saw faster upgrading of networking from 100 megabits per second (Mbps) to 1,000 Mbps and a faster than expected proliferation of Internet Protocol switching technology throughout the business enterprise."