Denver, CO, 06/03/2014 (Stocksntrade) – Broadcom Corporation (NASDAQ:BRCM), an international innovation leader in the semiconductor solutions for wired & wireless communications, announced that it is now exploring certain strategic alternatives for the company’s cellular baseband business. This includes the potential sale or even a wind-down. It has engaged the investment bank JP Morgan in relation with these efforts. A  successful sale or a wind-down of the company’s  cellular baseband business is now  expected to result in a reduction of around $700M in  the annualized GAAP research &  development and in  selling, general &  administrative expenses, of which around $100 million relates to the estimated reductions in  the stock-based compensation.

 The effect

 The non-GAAP research & development and the selling, general and administrative expenses are now expected to get reduced by around $600 million.  The estimates do not actually reflect impact of any of the potential impairment and, or the restructuring charges which are likely to also be recorded and are related to a successful sale or the wind-down of the BRCM cellular baseband business. Currently, Broadcom Corporation (NASDAQ:BRCM) expects to also organically reinvest around $50M of the savings on an annualized-basis into the projects in the Broadband and Infrastructure and it s Connectivity businesses.

 The update

 The incremental spending is now expected to strengthen as well as accelerate its plans in the small cells, and embedded processing as low-power connectivity space. Now, Broadcom Corporation (NASDAQ:BRCM) has also updated the company’s business outlook for the 3 months ending 30 June 2014. It continues to expect the revenue to be between $2.0B- $2.1 billion. BRCM expects both GAAP & the non-GAAP product gross-margin to be at/above the high-end of its previously-guided range, which is primarily driven by a mix. But there really is no assurance that the exploration process will actually result in a sale anytime soon.

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