Qualcomm Shares Fall as Earnings Outlook Disappoints

Qualcomm set a current-quarter earnings and revenue target that missed Wall Street expectations, sending its shares down 8.2 percent on fears of a slower-than-expected wireless chip market recovery.

Qualcomm, the biggest maker of cellphone chips and often seen as the best place to invest in advanced wireless technology, cut its full-year revenue target, citing competitive pricing and a slow recovery in developed markets.

It said current-quarter revenue would fall to a range of $2.4 billion to $2.6 billion, compared with analysts’ average estimate of $2.75 billion, according to Thomson Reuters.

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For the quarter ending in March, Qualcomm’s earnings per share target of 49 cents to 53 cents, excluding items, also fell short of analysts’ average forecast of 57 cents.

Shares of Qualcomm fell more than 5 percent in extended trading Wednesday.

The company’s stock [QCOM  47.20  0.31  (+0.66%)   ] finished the regular New York Stock Exchange session at $47.15. Volume exceeded 19 million shares before the closing bell.

Broadpoint Amtech analyst Mark McKechnie said the guidance likely means that cheaper phones are likely selling better in emerging markets than costlier devices in longer-established cellphone markets.

“The March guidance is disappointing relative to expectations,” McKechnie said. “It’s probably more of an end-market thing. I don’t think they’re losing market share. The mix of handsets is shifting lower.”

However, Qualcomm’s profit for the first fiscal quarter ended Dec. 27, rose sharply and beat expectations.

Qualcomm said its first-quarter net profit rose to $841 million, or 50 cents per share from $341 million, or 20 cents per share, a year ago. Excluding certain items, Qualcomm earned 62 cents a share, well ahead of the average analyst expectation for 56 cents, according to Thomson Reuters.

Revenue rose to $2.67 billion from $2.52 billion in the year-ago quarter when the entire industry was suffering from a collapse in demand during the global recession. Analysts’ estimates averaged $2.698 billion, according to Thomson Reuters.

Qualcomm said it was cutting its fiscal 2010 revenue target to a range of $10.4 billion to $11 billion from its previous target of $10.5 billion to $11.3 billion.

“A subdued economic recovery in developed regions, including Europe and Japan, combined with relative strength at the lower end of the market, is changing our estimated 3G device average selling price and chipset mix for this fiscal year,” Chief Executive Paul Jacobs said in a statement.

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