Wireless chipmaker Qualcomm posted an 18 percent rise in quarterly profit and gave an outlook that matched analyst estimates, driving its shares up more than 7 percent on relief the weak U.S. economy was not hurting demand for its mobile phone chips.
Qualcomm's results came on the same day that cell phone maker
"All in all it was a pretty good quarter in a questionable tape (stock market)," said analyst Cody Acree of Stiefel Nichlas. "Between Qualcomm and TI, you've really got a good look at a healthy wireless market."
Qualcomm posted a profit of $767 million, or 46 cents a share for its fiscal first quarter ended December 30, compared with $648 million, or 38 cents a share, a year ago.
Revenue rose 21 percent to $2.44 billion, better than the average analyst forecast of $2.22 billion, according to Reuters Estimates.
Profit in the quarter before stock-based compensation and other items was 52 cents per share, Qualcomm said in a statement, just a penny short of Wall Street expectations.
"The demand for CDMA-based devices, applications and services continues to accelerate around the world," Chief Executive Paul Jacobs said in a statement.
CDMA is a cell phone technology used by Qualcomm and others and it is also used in smart phones.
"We're continuing to look for any signs of a slowdown in the wireless phone business, but thus far things seem to be happening pretty much in line with what we had expected at the outset of the year," said Bill Keitel, Qualcomm's chief financial officer via telephone. "We are seeing a reasonably healthy wireless phone market looking forward despite some economic concerns."
Qualcomm has been embroiled in battles with rival Broadcom and handset maker Nokia. At issue with Broadcom are patent disputes; its disagreement with Nokia involves a failure of the two companies to renew a licensing agreement that expired in April.
Late in December 2007, a California federal judge barred Qualcomm from selling products infringing three Broadcom patents in the United States, but said it could sell some chips using the patents through the end of January 2009 if it paid royalties.
Qualcomm President Steven Altman said on a conference call that it would have chips without the technology covered by the patent at issue--called the 686 patent--in handsets by the end of the first calendar quarter.
"It's looking to be a little faster ramp as of today than just at the outset of this month," CFO Keitel said.
Regarding its dispute with Nokia, Altman said the two companies have made "no significant progress in our attempts to reach an amicable resolution."
For the current quarter, San Diego, Calif.-based Qualcomm forecast earnings per share before items of 50 cents to 52 cents on revenue of $2.4 billion to $2.5 billion.
That compares with current average analyst estimates of a profit of 52 cents per share on revenue of $2.43 billion, according to Reuters Estimates.
"It's been Qualcomm's history to be conservative on their guidance and then beat," Acree said.
Qualcomm shares advanced 7.3 percent to $39.30 in after-hours trading. In regular Nasdaq trading, the stock had fallen 0.79 percent to close at $36.63.
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