This summary is based on the second quarter fiscal 2007 earnings call conducted by Broadcom Corp. (BRCM: chart) on July 19, 2007.

Management:

VP of Corporate Communications: Peter Andrew
President and CEO: Scott McGregor
Chief Financial Officer: Eric Brandt

Key Investors Issues

- Revenues were down 5% to $897.9 million.
- Net income dropped 67.7% to $34.3 million or 6 cents a share.
- The firm closed the acquisitions of Octalica and Global Locate.
- The firm entered into a licensing agreement with Verizon Wireless.

Year-to-date Highlights

- Revenue was $1.8 billion, a decrease of 2.3% from $1.82 billion reported in the prior year.
- Net income was $95.2 million or 16 cents a share down from $223.8 million, or 37 cents a share in 2006.
- R&D expenses increased 19% to $633 million.

Second Quarter Highlights

Revenue of $897.9 million was down 4.6% from $941.1 million in the prior year as a result of declining performance across most business segments.

- Broadband communications accounted for 39% of total revenue, mobile and wireless for 30% and enterprise networking for 31%.
- Gross margin of 52.4% remained slightly above the long-term model of 50% to 52%, and in consistence with guidance driven by the strong efforts of the operations group.

In the broadband communications market, all businesses were flat to up on a sequential basis, offset, by one of the end customers'' inventory reduction efforts in cable modems.

- In the mobile and wireless markets, businesses declined in Bluetooth due to issues at a particular customer and were offset by increases in wireless LAN, VoIP and mobile multimedia lines of businesses.
- As expected, the enterprise networking business grew modestly driven by the timing of customer requests for some of the gigabit Ethernet switch products, and the fact that the controller business did not fall off as sharply as previously anticipated.

The firm continued to see a temporary spike in R&D as a percentage of sale as it invested aggressively to secure future deign wins in the emerging businesses.

- The company is moving forward with the 65 nanometer migration as a quarter of the tape-outs were in 65 nanometer with a number of additional tape-outs occurring just after the quarter end.
- As previously indicated, by the fourth quarter, the firm expects almost 90% of tape-outs will be in 65 nanometer and continues to see the 65 nanometer giving the company the definite competitive advantage in a design win process in terms of offering low power and the ability to integrate features and functionalities into designs.
- In addition, the expanded use of MPWs and other efficiencies have allowed the firm to accelerate prototyping to customers.

Net income was $34.3 million or 6 cents a share, down 67.7% from $106.1 million, or 18 cents a share in 2006 following an increase in in process research and development costs and declining revenues.

- Operating expenses increased 12% to $452 million over the prior year due principally to annual merit increases, as well as increase in headcount and prototyping costs, which were partially offset by lower legal and facilities expenses.
- The firm increased the total company headcount by 254 people, to worldwide total headcount of 5,827, including 4300 employees in engineering or 74% of the totaled headcount.
- Cash flow from operations was $158 million as cash and marketable securities on hand decreased by $82 million to $2.48 billion driven by $216 million in share repurchases.
- The company had some benefits from proceeds from employee stock sales of $49 million which were more than offset by repurchases of common stock, capital expenditures, which included expenditure to build out and move to the new Irvine campus and the acquisition of Octalica.

Inventory levels were lowered by $9 million to $191 million, and inventory turnover was 8.9 times.

- The percentage of sales made through distributors remained low at 15%, and the firm began to provide more products to hubbing arrangements with customers.
- Accounts receivable day sales outstanding increased from 37 days to 39 days.

- The firm commenced a new share repurchase program under which it can purchase up to $1 billion of its Class A common stock over an 18 months period that commenced in February of 2007, repurchasing $6.1 million shares at a cost of $190 million.

Segment Highlights: