Qualcomm Inc. (QCOM: Quote) said Wednesday its profit for the third quarter rose 17 percent from last year, helped by strong chip sales amid increased adoption of 3G and 3G/4G technologies, as well as gains from sale of spectrum. Nonetheless, earnings for the quarter fell short of Street estimates by a penny, while revenues too came in below expectations.
Looking ahead, Qualcomm detailed a weak outlook for the fourth quarter, and cut the top end of its earnings and sales outlook for the full year, partly owing to shortage of 28 nm chips.
Qualcomm shares initially lost 4 percent in after-hours trade on the Nasdaq, but later pulled back with the stock now up over 5 percent.
Qualcomm makes digital wireless telecommunications products based on its code division multiple access (CDMA) technology and other technologies.
Qualcomm's revenue for the third quarter jumped 28 percent from last year. CDMA Technologies revenue surged 31 percent from last year, accounting for most of the sales, and Technology Licensing revenue was up 27 percent.
During the quarter Qualcomm shipped 141 million units of CDMA-based Mobile Station Modems (MSM), up 18 percent from last year.
Qualcomm in April had cited shortage of 28nm chips across the industry, and has been working to address the problem.
Another issue factored is Apple Inc. (APPL) that uses Qualcomm chips in its smartphones. With an expected launch of iPhone 5, as well as devices by other companies, consumers are said to be deferring purchases.
But Qualcomm CEO Paul Jacobs echoed a positive note, stating, "...our growth estimates for 3G/4G device shipments in calendar 2012 have moderated slightly, and we now expect the demand profile of the calendar year to be more back-end loaded as new devices are launched for the holiday season..."
San Diego, California-based Qualcomm reported third quarter net income of $1.21 billion or $0.69 per share, compared to $1.04 billion or $0.61 per share last year.
Results for the 2012 quarter include a gain of $761 million related to the sale of 700 MHz spectrum.
Excluding items, earnings for the quarter were $1.49 billion or $0.85 per share, compared to $1.24 billion or $0.73 per share last year.
On average, 34 analysts polled by Thomson Reuters expected earnings of $0.86 per share for the quarter. Analysts' estimates typically exclude special items.
Qualcomm posted quarterly revenue of $4.63 billion, compared to $3.62 billion last year. Thirty-six analysts had a consensus revenue estimate of $4.68 billion.
Looking ahead to the fourth quarter, Qualcomm expects net earnings of $0.62 to $0.68 per share, and adjusted earnings of $0.78 to $0.84 per share. Revenues are expected between $4.45 billion and $4.85 billion.
Street analysts currently expect earnings of $0.89 per share and revenue of $4.90 billion.
For the full year 2012, Qualcomm now expects net earnings of $3.41 to $3.47 per share, and adjusted earnings of $3.61 to $3.67 per share. It earlier estimated net earnings of $3.41 to $3.56 per share, and adjusted earnings of $3.61 to $3.76 per share.
Revenues for the year are now estimated to range between $18.7 billion and $19.1 billion, compared to its prior outlook of $18.7 billion to $19.7 billion.
Analysts currently expect earnings of $3.74 per share on revenues of $19.20 billion for the full year.
Qualcomm closed Wednesday at $56.05, up 2.92%, on a volume of 19.4 million shares on the Nasdaq. In after hours, the stock gained $3.21 or 5.73%. In the past year, the stock has traded in a range of $45.98 - $68.87.
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by RTT Staff Writer
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