Broadcom (Nasdaq:BRCM) Shares Drop on Expense Concerns

A number of companies across a broad spectrum of sectors have fallen in share price after strong quarterly reports, as in the recent case of Broadcom (Nasdaq:BRCM), based on concerns over increased expenses.

An example of that is in the auto sector, where Ford (NYSE:F), General Motors (NYSE:GM) and Toyota (NYSE:TM) are all giving a nod toward the probability of increased commodity costs which will pressure margins and earnings.

That creates problems for other companies as well, such as Sirius XM (NASDAQ:SIRI), which depends on robust auto sales to increase its subscription numbers, and ultimately, revenue and earnings.

For Broadcom, their shared plunged Wednesday even after a strong increase in profits for its last quarter, where they were four times the previous year.

Broadcom generated profits of $266.2 million, or 47 cents a share, up from $59.2 million, or 11 cents a share, in the same quarter last year. Revenue increased from $1.34 billion to $1.95 billion.

Concern over expenses comes from prior spending habits of Broadcom which have driven down margins and earnings.

Broadcom closed Wednesday at $43.79, down $2.60, or 5.59 percent.