Chip maker Qualcomm Inc. (QCOM: Quote), said Wednesday its profit for the second quarter more than doubled from last year, led by strong sales growth and hefty one-time gains from the sale of a valuable spectrum. Both earnings and revenue for the quarter came in ahead of Street estimates.
Looking ahead, Qualcomm surprisingly has provided a weak outlook for the third quarter, but raised its adjusted earnings outlook for the full year 2012.
Qualcomm shares initially slid 6 percent in extended session on the Nasdaq, but subsequently pulled up.
Qualcomm's second-quarter 2012 results include an after-tax benefit of $761 million related to the sale of 700 MHz spectrum. The prior year quarter meanwhile included a loss of $269 million following the discontinuation of FLO TV.
Qualcomm makes digital wireless telecommunications products and services based on its code division multiple access (CDMA) technology and other technologies.
Qualcomm's revenue for the second quarter jumped 28 percent from last year. CDMA Technologies revenue for the quarter surged 56 percent from last year, accounting for most of the sales. Technology Licensing revenue meanwhile edged down 1 percent from last year. Wireless and Internet revenues, which form a small part of total sales, were up 5 percent from last year.
Commenting on the results, Qualcomm CEO Paul Jacobs said results reflect strong demand for 3G- and 4G-enabled devices across both developed and emerging regions.
Qualcomm during the quarter shipped 152 million units of CDMA-based Mobile Station Modems (MSM), up 29 percent from last year.
Qualcomm is reaping gains from the overwhelming success of Apple (AAPL) and Samsung devices that use Qualcomm chips, and its fortune hinges on the smartphone and tablet market. The company has carved a niche position and is set to ride the 4G LTE wave as carriers like AT&T (T) and Verizon (VZ) take a plunge in that direction.
San Diego, California-based Qualcomm reported second-quarter net income of $2.23 billion or $1.28 per share, compared to about $1 billion or $0.59 per share last year.
Excluding items, earnings for the quarter were $1.76 billion or $1.01 per share, compared to $1.45 billion or $0.86 per share last year.
On average, 34 analysts polled by Thomson Reuters expected earnings of $0.95 per share for the quarter. Analysts' estimates typically exclude special items.
Qualcomm posted second-quarter revenue of $4.94 billion, compared to $3.87 billion last year. Thirty-five analysts had a consensus revenue estimate of $4.84 billion for the quarter.
At the end of the quarter, Qualcomm had cash, cash equivalents and marketable securities of $26.6 billion, compared to $22.1 billion in the prior year.
Looking ahead, Qualcomm expects third-quarter net earnings of $0.67 to $0.73 per share, and adjusted earnings of $0.83 to $0.89 per share. Revenue is expected to be between $4.45 billion and $4.85 billion.
Street analysts currently expect earnings of $0.90 per share and revenue of $4.80 billion.
For the full year 2012, Qualcomm now expects net earnings of $3.41 to $3.56 per share, and adjusted earnings of $3.61 to $3.76 per share.
Earlier, the company had projected full year net earnings of $3.36 to $3.56 per share, and adjusted earnings of $3.55 to $3.75 per share. Qualcomm continues to expect full year revenue of $18.7 billion to $19.7 billion.
Analysts currently expect earnings of $3.77 per share on revenue of $19.37 billion for the full year.
Qualcomm shares are now trading at $64.61, down $2.38 or 3.55%. The stock made strong gains over the months and has traded between $45.98 and $68.87 in the past year.
by RTT Staff Writer
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