Smartphones fuel Qualcomm record

Qualcomm reported record quarterly revenues and raised its guidance for the year as global demand for smartphones and tablets grew.

Paul Jacobs, chief executive said in an interview: “The world is coming our way, everyone wants smartphones, tablets and other mobile computing devices“.

The leading wireless chipmaker by sales reported sales and profits ahead of Wall Street expectations for its second quarter ending in March – revenues of $3.9bn were up 46 per cent on a year ago and were ahead of the analyst consensus of $3.6bn, according to Thomson Reuters. Excluding some costs, profits of 86 cents a share beat the street’s 80-cents expectation.

After closing 3.5 per cent higher in New York, Qualcomm shares rose another 5 per cent to $58 in after-hours trading.

Mr Jacobs dismissed concerns that average selling prices of phones might fall – along with Qualcomm’s share from licensing fees and the chips inside – as demand grew in emerging markets.

He said: “People there are buying higher-end devices as well,” he said, pointing to Qualcomm raising its 2011 guidance for phone average selling prices from $190-$200 to $199-$209.

In its home market, Apple reported on Wednesday that US iPhone shipments were up 155 per cent on a year ago, with a version featuring Qualcomm chips and sold by Verizon Wireless playing a key role.

Qualcomm shut down its FLO TV business at the end of the quarter as the mobile TV service failed to make an impact in the US. It recorded $310m in restructuring costs for the quarter, but said it had sold the spectrum that FLO TV used for $1.9bn.

The San Diego-based company also raised its guidance for revenues and profits in its 2011 year – from a midpoint of $13.9bn in revenues to $14.4bn and from profits of $2.98 a share to $3.09.

Mr Jacobs said supply-chain concerns stemming from the earthquake, tsunami and nuclear disaster in Japan had not affected Qualcomm’s ability to make chips and it had seen very little impact on demand for its products.

Meanwhile, Freescale, a chipmaker whose factory at Sendai in Japan was badly damaged in the earthquake, said on Wednesday it was taking a $90m charge in its first quarter related to its closure. The facility was due to close this year and no attempts have been made to reopen it.