Avago Tech. announced earnings drop

Avago Technologies, a US-based maker of chips for cell phone and computer products that has operations in China, announced an earnings drop due to higher expenses in the fiscal fourth quarter, MarketWatch reported. The firm expected first quarter revenue to fall by a further 10-14%. “Despite a slowdown in our industrial market, we delivered sequential revenue growth in the fourth quarter as we ramped with next generation smartphones,” said Hock Tan, Avago’s CEO. “However, looking to the first quarter, we expect a seasonal slow-down in handsets while the supply chain contraction in our industrial market continues.” The company has benefitted from increased industrial and infrastructure spending in China. While revenues rose 8.9% over the fourth quarter, expenses increased by 11%. Avago’s shares dropped 2.7% in after-hours trading after the forecast was announced.