Divergent Paths For Broadcom and Silicon Labs

Once again, the semiconductor sector offers a remedial lesson that not every company in a sector is inexorably bound to the fate of its brothers. While semiconductor stocks from Linear (Nasdaq:LLTC) to Texas Instruments (NYSE:TXN) to Intel (Nasdaq:INTC) have had their issues with near-term growth outlooks, Broadcom (Nasdaq:BRCM) seems to be rolling on without many worries. In contrast, Silicon Labs (Nasdaq:SLAB) seems mired in a miss-and-lower cycle that is punishing patient shareholders.

The Quarters That Were
Broadcom certainly is not suffering its prime exposure to Apple's (Nasdaq:AAPL) iPhone/iPad, nor its decision to focus on high-performance "combo" chips. Revenue for this third quarter jumped 44% from last year, and 13% sequentially. Better still, the company actually raised its guidance for the next quarter, and is looking for modest sequential growth (where most companies are forecasting sequential declines). Broadcom also benefited by holding reported operating expense growth to 26% - meaning that the company saw significant operating leverage and operating income growth.

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