Broadcom stock rallies nearly 7% on earnings beat, $10 billion share buyback program

New buyback program lasts until end of 2022 with Broadcom sitting on $12 billion in cash

Broadcom Inc. shares rallied in the extended session Thursday after the chip and software company topped Wall Street estimates for the quarter and announced an aggressive new share buyback program.

Broadcom $(AVGO)$ shares surged nearly 7% after hours, following a 0.9% decline in the regular session to close at $583.42.

The company reported fiscal fourth-quarter net income of $1.91 billion, or $4.45 a share, compared with $1.25 billion, or $2.93 a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation and other items, were $7.81 a share, compared with $6.35 a share in the year-ago quarter.

Revenue rose to $7.41 billion from $6.47 billion in the year-ago quarter. Analysts surveyed by FactSet had expected earnings of $7.74 a share on revenue of $7.36 billion, based on Broadcom's forecast revenue of about $7.35 billion.

The company reported a 76% gain in chip sales to $5.63 billion from the year-ago period, and a 24% rise in infrastructure software sales to $1.77 billion. Analysts had forecast chip sales of $5.6 billion and infrastructure software sales of $1.73 billion.

"Broadcom concluded the year with record fourth quarter results driven by a rebound in enterprise, and continued strength from cloud and service provider demand," said Hock Tan, Broadcom president and chief executive, in a statement. "Our infrastructure software growth continues to be steady with our focus on strategic customers."

Broadcom forecast revenue of about $7.6 billion for the fiscal first quarter, while analysts had estimated revenue of $7.24 billion.

Broadcom also said its board authorized a new $10 billion share buyback program that is effective until the end of 2022. The company reported cash and cash equivalents of $12.16 billion at the end of its fiscal year.

Over the past 12 months, shares of Broadcom have gained 40%. In comparison, the S&P 500 index has advanced 27%, the tech-heavy Nasdaq Composite Index has risen 26%, while the PHLX Semiconductor Index has grown 42% over that time.