Qualcomm, the leading mobile phone chipmaker by sales, raised its 2011 forecasts significantly on Wednesday as it eyed a significant expansion into tablets, e-readers and consumer electronics in the home.
|Sales||Net profit||Earnings per share||Dividend|
|$3.35bn||$1.17bn||71 cents||19 cents|
The San Diego-based company reported a record first quarter helped by strong smartphone sales. It raced past Wall Street expectations for its earnings and outlook, prompting its shares to rise more than 6 per cent to $55.07 in after-hours trading.
The second-largest US chipmaker after Intel reported that revenues rose 25 per cent year on year to $3.35bn and earnings per share were up 42 per cent at 71 cents. Analysts expected profits of 59 cents a share on sales of $3.2bn, according to a Bloomberg survey.
Paul Jacobs, chief executive, said Qualcomm had benefited from smartphone unit sales that grew 70 per cent year on year in the fourth quarter and were expected to grow 50 per cent this year.
He highlighted US operator Verizon Wireless’s planned launch of an iPhone containing Qualcomm chipsets in February and Microsoft‘s demonstration of the next version of Windows, including Qualcomm’s Snapdragon processor, as positive developments for the company.
The company said that a dual-core version of Snapdragon with chipsets capable of producing advanced graphics and making 4G connections would increase Qualcomm’s presence in the tablet sector this year.
Graphics chipmaker Nvidia has made the running in the sector with its Tegra 2 processor featuring in tablets such as the Motorola Xoom, which will be launched this quarter.
Qualcomm announced its biggest acquisition this month – the $3.1bn purchase of chipmaker Atheros.
Steve Mollenkopf, executive vice-president, said the deal would mean Qualcomm “could accelerate the extension of our technologies and platforms beyond cellular to computing, consumer electronics and networking”.
Qualcomm raised its revenue guidance for its fiscal year ending in September by $1.2bn, with $650m of this driven by an improved outlook for its chip business and $550m due to improving conditions in its licensing business. It said royalties from the latter would benefit from the resolution of a licensing dispute with an unnamed company which had been underpaying Qualcomm.
The chipmaker expects sales of $3.45bn-$3.75bn in the current quarter, up 30 per cent to 41 per cent on a year ago and ahead of Wall Street expectations of $3.14bn. The group raised its forecast for fiscal-year sales to about $13.9bn, up from prior guidance of about $12.7bn.