SAN DIEGO — Qualcomm said Wednesday that its fiscal third-quarter profit rose 4 percent and revenues fell less than analysts expected, allaying concerns among investors that the developer of wireless chips and technologies was failing to capitalize on consumers’ appetites for smartphones.
The company also raised its profit and revenue estimates for 2010.
Qualcomm disappointed investors the previous two quarters as prices for phones fell sharply and cut into royalty payments. Qualcomm sells chips to phone makers and collects licensing fees from companies that use its patented technologies.
The San Diego company earned $767 million, or 47 cents a share, in the three-month period ending June 27, compared with a profit of $737 million, or 44 cents a share, in the same period last year. The latest result includes a loss of 7 cents a share from share-based compensation and 3 cents a share from tax items.
Excluding those charges, Qualcomm earned 57 cents a share, 3 cents higher than estimated by analysts polled by Thomson Reuters.
Revenue slipped 2 percent to $2.71 billion from $2.75 billion, but it was higher than the $2.63 billion that analysts expected.
Bill Kreher, an analyst at Edward Jones, said the results show that Qualcomm is well-positioned to benefit from the spread of the high-end phones.
“The shipments were stronger than we anticipated and the average selling price held up better than some had feared,” he said.
Qualcomm said that it shipped 103 million chipsets during the quarter, up 10 percent from last year.
The company estimated that its licensees shipped 134 million to 138 million devices at an average price of $183 to $189.
QUALCOMM EARNINGS
STEADY BUSINESS: Qualcomm”s earnings for its latest quarter were $767 million, up just 4 percent from last year. Revenue slipped 2 percent to $2.71 billion. Shipments of chips for cell phones were up 10 percent from last year.
JUMPY STOCK: Despite being almost flat with last year, the results beat investor expectations. The stock rose more than 5 percent in extended trading, after the results.
SMART CHIPS: The company seems to be latching on to the trend for ever smarter, more capable phones, and benefiting from it.
Source: Associated Press
