Qualcomm Profit Rises In Line, Lifts FY Outlook; Stock Up

(RTTNews) - Mobile chip maker Qualcomm Inc. (QCOM), Wednesday posted a 31 percent jump in third-quarter profit, due mainly to strong sales of its Snapdragon processor. Earnings for the quarter were in line with Wall Street estimates, while revenues topped expectations.

The company lifted its earnings outlook for the fiscal year 2013 as it sees opportunities for growth of 3G/4G devices. Qualcomm shares gained 4.7 percent in after-hours trade on the Nasdaq.

"We delivered another strong quarter as our Qualcomm Snapdragon solutions were prominent in a broad set of flagship smartphones," said CEO Paul Jacobs.

Qualcomm provides baseband chips, which connect phones to cellular networks, to leading smartphone makers such as Samsung, and licenses its code division multiple access technology.

With the rising sales of smartphones and tablets, companies like Qualcomm are immensely benefited. Nonetheless, concerns do linger as niche product makers like Samsung and BlackBerry recently reported weakness in shipments.

Other challenges for Qualcomm include Intel Corp.'s (INTC) Atom processors that are expected to penetrate the mobile devices segment.

San Diego, California-based Qualcomm reported quarterly revenues of $6.24 billion, up 35 percent from $4.63 billion last year. Analysts polled by Thomson Reuters estimated revenues of $6.05 billion.

Among segments, Qualcomm CDMA Technologies (QCT) revenues jumped 47 percent year-over-year to $4.22 billion, and Qualcomm Technology Licensing (QTL) was up 17 percent at $1.87 billion.

Qualcomm shipped 172 million units of CDMA-based Mobile Station Modems in the quarter, up 22 percent from last year.

Net earnings for the third quarter increased to $1.58 billion or $0.90 per share from $1.2 billion or $0.69 per share a year ago.

Excluding items, adjusted earnings for the quarter were $1.82 billion or $1.03 per share, compared with $1.49 billion or $0.85 per share in the prior year. Analysts estimated earnings of $1.03 per share. Analyst estimates typically exclude one-time items.

Qualcomm expects fourth-quarter net earnings of $0.86 to $0.94 per share, adjusted earnings of $1.02 to $1.10 per share, and revenues of $5.9 billion to $6.6 billion. Analysts currently expect earnings of $1.08 per share on revenues of $6.29 billion.

For the fiscal year 2013, Qualcomm now expect net earnings in the range of $3.90 to $3.98 per share and adjusted earnings of $4.48 to $4.56 per share. The chip maker had earlier estimated net earnings of $3.78 to $3.93 per share and adjusted earnings of $4.40 to $4.45 per share.

The company raised the lower end of its fiscal 2013 revenue outlook by $300 million and now expect revenues of $24.3 billion to $25 billion.

Analysts currently expect earnings of $4.54 per share on revenues of $24.48 billion for 2013.

Qualcomm stock closed Wednesday at $61.39, down 1.46%, on a volume of 17.6 million shares. In after-hours trade, the stock gained $2.91 or 4.74%.