Increased demand for third generation mobile phone handsets enabled Qualcomm, the communications chipmaker, to beat Wall Street earnings expectations for its fiscal third quarter and raise its guidance for the full year.
Although revenues were unchanged at $1.3bn in the three months to June, net income was $560m, or 33 cents a share, up from $486m or 29 cents.
On a pro-forma basis excluding investment gains and other one-off items earnings per share were 28 cents. Analysts had forecast earnings of about 25 cents.
The stock gained $1.29 to $37.38 following the announcement, which came after the close in New York.
Qualcomm developed much of the technology behind the CDMA-2000 standard for third generation mobile telephony that is used widely in the US and Asia. It's technology is also incorporated into the alternative W-CDMA standard around which 3G services are being built in Europe.
As well as selling chips and chipsets to phone manufacturers, Qualcomm earns royalties by licencing its technology to other chipmakers.
“We are projecting continued acceleration in [3G phone] shipments towards the end of 2005 and beyond,” said Paul Jacobs, who this summer took over the role of chief executive from Irwin Jacobs, his father.
For the current quarter, Qualcomm now expects earnings of 28-30 cents on revenues of $1.43-$1.53bn.
In the only dark spot, Qualcomm cut full-year estimates for phones based on W-CDMA technology to 45 million from 50 million citing weaker than expected demand in Europe.