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November 2, 2011 10:57 pm
Qualcomm has bucked slower growth in the smartphone market to report revenues and profits ahead of Wall Street expectations.
Shares of the biggest mobile phone chipmaker by revenues rose nearly 10 per cent to $57.01 in extended trading in New York as it also delivered a bullish outlook.
The San Diego-based company reported sales rose 39 per cent year on year to $4.12bn in its fiscal fourth quarter ending September 25, while profits grew 18 per cent to 80 cents a share.
Analysts expected $4bn in revenues and earnings of 78 cents a share.
Paul Jacobs, chief executive, said sales of smartphones, the continuing transition from 2G to 3G networks and strength in emerging markets had benefited Qualcomm.
Mobile phone sales growth slowed in the third quarter, according to the IDC research firm, as smartphone growth declined in key mature markets. IDC reported 12.8 per cent growth for the quarter last week – the second lowest rate over the past two years. It blamed economic uncertainty and consumers waiting for the latest smartphones, such as Apple’s iPhone 4s.
Mr Jacobs said Qualcomm was helped by its diversification across geographies and handset vendors.
“Smartphones in China are going really strong now and cell phones are staples not luxury items any more – even in tough economic times, people will buy themselves a new phone,” he told the Financial Times.
Qualcomm’s revenues for the fiscal year were $14.96bn and it predicted a rise of 20 to 27 per cent in its current fiscal year to $18bn-$19bn. This was well ahead of analyst predictions of $17.3bn, according to Bloomberg data.
Qualcomm has been successful in expanding beyond phones to tablets with its processors and wireless chips. The acquisition of the chipmaker Atheros this year for $3.2bn has expanded its reach into consumer electronics devices and networking in the home.
The company reported shipments of its Snapdragon chipsets for mobile devices grew by four times this year.
Snapdragon processors have been used by every handset maker for the latest Windows smartphones and Qualcomm doubled the number of baseband processors that feature in the iPhone with the introduction of the 4S model last month.
Mr Jacobs told an analyst conference call that he saw five key drivers for the future. There was the continued mass adoption of smartphones, which were expected to surpass 1bn units annually by 2015, while a second factor was the growth of 3G in emerging regions, which was 38 per cent in the third quarter year-on-year.
3G connectivity was also moving beyond the handset, he said, with AT&T reporting nearly half its third quarter net wireless additions came from devices other than handsets.
Mr Jacobs said the growth of advanced networks satisfying data needs and increased connectivity for not just people but devices that could talk to each other would also play to Qualcomm’s strengths.
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