AP
Qualcomm 1Q Profit Jumps 18 Percent
Wednesday January 23, 6:08 pm ET
By Elliot Spagat, AP Business Writer
Qualcomm First-Quarter Profit Jumps 18 Percent on Phone Demand


SAN DIEGO (AP) -- Chipmaker Qualcomm Inc. on Wednesday posted an 18 percent increase in fiscal first-quarter profit on strong demand for cell phones that surf the Internet and download music and video.

The world's second-largest maker of chips for cell phones also estimated results for the second quarter and the rest of the year that were pretty close to analysts' expectations. The news came against a backdrop of gloomy market assessments in recent days from industry heavyweights Motorola Inc. and Sprint Nextel Corp.

The results, released after markets closed, cheered investors. Qualcomm's stock jumped 6.5 percent, or $2.37, to $39, after hours, after falling 29 cents during regular trading on the Nasdaq Stock Market.

After Motorola's downbeat assessment of its handset division, investors were relieved that Qualcomm didn't deliver bad news of it own, said Mark McKechnie, a securities analyst at American Technology Research in San Francisco.

"It looked like a pretty ho-hum report, but some people may have been expecting a disaster," McKechnie said.

Qualcomm earned $767 million, or 46 cents a share, during the three-month period ended Dec. 30, up from $648 million, or 38 cents a share, the same period last year. The latest quarter included per-share charges of 1 cent from its strategic investments unit and 5 cents for stock-based compensation.

Excluding those charges, Qualcomm earned 52 cents per share, a penny shy of the estimate among analysts surveyed by Thomson Financial.

The world's second-largest maker of chips for cell phones said revenue grew 20 percent to $2.44 billion in the latest quarter, matching analysts' estimates.

For its second quarter, the San Diego-based company expects to earn 50 to 52 cents a share, excluding certain items, compared with analyst estimates of 52 cents. It expects revenue of between $2.4 billion and $2.5 billion, compared with analyst estimates of $2.44 billion.