Broadcom, Qualcomm, NXP Semiconductors: survival of the smallest?

This time I will do it the other way round: first I present the 3D graph, output  of the AnRep3D-generator. Then I will give an explanation.

Broadcom-Qualcomm-NXP_SC

 

 

Double-click the screenshot to see the real 3D-graph and manipulate it as you like: Clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

What do we see? Three companies in two years. Every “building” has sizes related to values from the annual report: total height is revenue with the height (thickness) of the roof representing profit (or loss if it’s red instead of green). Then the width represents the equity and the depth the total assets. So if a building is taller than another, this means the revenue was higher (than for another year or another company). A deep, narrow building means a lot of debt and so on.

Now why are Broadcom, Qualcomm and NXP semiconductors in the graph? Well, that’s simple: Qualcomm wants to buy NXP semiconductors and Broadcom wants to buy Qualcomm. So we are looking at a cascade of potential take-overs.

I expected NXP to be the smallest, looking at equity and total assets. Then Qualcomm would be larger but Broadcom had to be the richest party with the highest equity. Like in nature the smaller fish is eaten by a larger one, which in turn will be eaten by a really large one.

As we can see Qualcomm is larger than NXP indeed: both equity and total assets are twice as high. But for Broadcom it’s different. It wasn’t larger than Qualcomm in 2016 and in 2015 it was even smaller than NXP! Actually the 2016 company is not the same one as in 2015, because it’s just Avago, using the name of the company it took over. See: https://en.wikipedia.org/wiki/Broadcom  and https://www.bloomberg.com/news/articles/2015-05-27/avago-said-near-deal-to-buy-wireless-chipmaker-broadcom Still the new Avago-Broadcom combination shows about the same level of total assets, a lower equity and even a loss in 2016 where the others show a profit.

Also remarkable, is NXP having a high profit in 2015, but a lower profit with much higher revenue in 2016. Let me warn you about the broken bookyear for Broadcom and Qualcomm. Only for NXP Semiconductions the bookyear is from January 1 to December 31. Another warning: I am merely showing the power of the AnRep3D graphs and not giving any advice. Please read the original annual reports:

Broadcom: http://investors.broadcom.com/phoenix.zhtml?c=203541&p=irol-reportsother

Qualcomm: http://files.shareholder.com/downloads/QCOM/6048346403x0x915400/CD71F5A8-BEAA-4EEE-B385-2CD75B48B9D3/2016_Annual_Report_Form_10-K.pdf

NXP Semiconductors: http://investors.nxp.com/phoenix.zhtml?c=209114&p=irol-newsArticle_Print&ID=2241494 (the real Annual Report could not be found at the NXP site, but Google offers the pdf somehow – yet the numbers in the abstract are ok).

The input-file I used (values taken from the annual reports over 2016):

Broadcom-Qualcomm-NXP_Sc input

 

 

 

If you want to create graphs like this yourself, you can obtain a license. However, the demo (fully functional but limited to one company and one year) is free. Visit our website for more information: https://anrep3d.com

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About AnRep3D

AnRep3D is the new company, founded after the handover of Scientassist (together with VRBI) to one of my sons. From now I will focus on three-dimensional graphs for the financial markets, showing the main figures from annual reports in comparison.
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