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 With growth in the smartphone industry moving away from wealthy
markets such as the United States and toward China and other
emerging economies, where consumers favor less expensive devices,
Qualcomm has been focusing on costs to preserve its profit margins.
Qualcomm slightly raised its full-year forecast for earnings per
share to a range of $5.00 to $5.20, from $4.95 to $5.15, essentially
adjusting for first-quarter earnings that came in above the
company's own previous estimate.
"We raised the full-year EPS guidance but really just to reflect the
positive results of Q1. We see the rest of the year playing out
pretty much in line with our original expectations," Chief Financial
Officer George Davis said in an interview.
Qualcomm had first-quarter net income of $1.88 billion, down 2
percent. GAAP diluted earnings per share were $1.09. Its non-GAAP
earnings per share were $1.26, above its previous forecast of
between $1.10 and $1.20.
On Monday, lower-than-expected holiday iPhone sales and a weak
revenue forecast by Apple Inc <AAPL.O> renewed fears on Wall Street
about Chinese demand and a tepid global market.
While the majority of Qualcomm's revenue comes from selling baseband
chips that let phones communicate with carrier networks, most of its
profit comes from licensing patents for its ubiquitous CDMA
cellphone technology. As phone prices edge lower, Qualcomm receives
less royalty revenue.
Average prices for cellphones in the September quarter, used to
calculate licensing revenue for Qualcomm in the December quarter,
were between $219 and $225, the company said.
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The chipmaker on Wednesday reported first-quarter revenue of $6.62
billion, up 10 percent from the year-ago period. Analysts on average
had expected first-quarter revenue of $6.665 billion, according to
Thomson Reuters I/B/E/S.
It said revenue in the fiscal second quarter, which ends in March,
would range from $6.1 billion to $6.7 billion.
Analysts on average had expected first-quarter revenue of $6.665
billion and second-quarter revenue of $6.723 billion, according to
Thomson Reuters I/B/E/S.
Qualcomm shares were up 2.8 percent in extended trading after
closing down 1.21 percent at $71.12 on Nasdaq.
(Reporting by Noel Randewich; editing by
Andrew Hay)
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