Qualcomm Forecast May Top Predictions
By Ian King - Feb 1, 2012
Qualcomm Inc. (QCOM) raised its sales and profit expectations for this quarter and the year as the world’s biggest maker of mobile-phone chips benefits from growing demand for smartphones. The shares rose as much as 4.9 percent.
Sales for the second quarter ending in March will increase to $4.6 billion to $5 billion, the company said in a statement today reporting first-quarter earnings. Analysts were expecting $4.51 billion, the average of estimates in a Bloomberg survey.
Qualcomm’s ownership of code division multiple access, or CDMA, technology gives the San Diego-based company the ability to charge royalties on all 3G phones and networks, providing the majority of its profit. Qualcomm is also the largest seller of modem chips, which connect phones to mobile networks.
“It owns the right market,” said Daniel Berenbaum, an analyst at MKM Partners LP in Stamford, Connecticut, who recommends buying Qualcomm stock. “Smartphones are clearly the premier growth area.”
Qualcomm rose to $62.50 in extended trading following the announcement. The stock earlier closed at $59.56 in New York trading and has gained 8.1 percent in the past year.
The company, with customers that include Samsung Electronics Co. and Apple Inc., also supplies applications processors, the chips that run programs in mobile phones, and is trying to sell bulked up versions for use in larger machines such as personal computers.
Full-Year Forecast
Qualcomm said sales for the full fiscal year will rise 25 percent to 32 percent to a range of $18.7 billion to $19.7 billion. Earnings per share will climb to $3.36 to $3.56, the company said. Qualcomm had previously predicted revenue of $18 billion to $19 billion and profit of $2.80 to $3 a share.
Analysts had estimated earnings per share of $2.97 on sales of $18.47 billion, according to Bloomberg data.
The average selling price of phones in its fiscal second quarter, used to calculate licensing revenue, will be between $204 to $216, up from an earlier prediction of $197 to $209 per device, the company said.
Qualcomm’s fiscal first-quarter net income rose to $1.4 billion, or 81 cents a share, from $1.17 billion, or 71 cents, a year earlier. Revenue climbed 40 percent to $4.68 billion in the period, which ended Dec. 31. Analysts on average projected profit of 75 cents a share and sales of $4.6 billion.
To contact the reporters on this story: Ian King in San Francisco at ianking@bloomberg.net;
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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