Qualcomm Profit Up 18%, But Misses View; Stock Down

(RTTNews) - Mobile chip maker Qualcomm Inc. (QCOM), Wednesday posted an 18 percent jump in fourth-quarter profit, as robust demand for smartphones boosted sales of chips such as the Snapdragon. However, quarterly earnings fell short of Wall Street estimates, while revenue surpassed expectations.

Qualcomm detailed some weak adjusted earnings and revenue outlook for the first quarter, while indicating strong earnings forecast for 2014 with softness seen in revenue.

Investors were not too overly pleased with the news, sending Qualcomm shares down 5 percent in after-hours trade on the Nasdaq.

CEO Paul Jacobs said the company sees strong growth of 3G and 3G/4G multimode devices globally, mainly in China. "We expect double-digit compound annual growth rates for both revenues and earnings per share over the next five years," Jacobs stated. Qualcomm provides baseband chips, which connect phones to cellular networks, to leading smartphone makers, and licenses its code division multiple access technology.

The company has been benefiting from a surge in smartphone sales and tablets that use its chips. But investors have also been concerned about a saturation in smartphone sales in developed markets, while regions such as Asia appear lucrative.

San Diego, California-based Qualcomm reported fourth-quarter revenue of $6.48 billion, up 33 percent from $4.87 billion last year. On average, 35 analysts polled by Thomson Reuters estimated revenue of $6.34 billion for the quarter.

Among segments, Qualcomm CDMA Technologies (QCT) revenue surged 42 percent year-over-year to $4.46 billion, and Qualcomm Technology Licensing (QTL) was up 19 percent at $1.87 billion.

Qualcomm shipped 190 million units of CDMA-based Mobile Station Modems in the quarter, up 35 percent from last year.

Net earnings for the fourth quarter increased to $1.5 billion or $0.86 per share from $1.27 billion or $0.73 per share a year ago.

Excluding items, adjusted earnings for the quarter were $1.82 billion or $1.05 per share, compared with $1.55 billion or $0.89 per share in the prior year. Thirty-five analysts had a consensus earnings estimate of $1.08 per share. Analyst estimates typically exclude one-time items.

Qualcomm expects first-quarter net earnings in the range of $0.92 to $1.02 per share, adjusted earnings of $1.10 to $1.20 per share and revenue of $6.3 billion to $6.9 billion. Analysts currently expect earnings of $1.29 per share on revenue of $6.99 billion for the quarter.

MSM shipments for the quarter are expected between 195 million and 210 million units.

For fiscal year 2014, Qualcomm expect net earnings in the range of $4.25 to $4.45 per share, adjusted earnings of $4.95 to $5.15 per share and revenue of $26 billion to $27.5 billion. Analysts currently expect earnings of $4.95 per share on revenue of $27.5 billion for the year.

Qualcomm closed Wednesday's regular trade at $69.74, up $0.74 or 1.07%, on a volume of 12 million shares. In after-hours, the stock dropped $3.63 or 5.21%, to trade at $66.11. In the past year, the stock trended in the range of $58.11 - $70.37.