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11/4/2010
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Qualcomm Earnings Rise On Smartphone Growth

The mobile chipmaker reported a strong fourth quarter and anticipation for strong results in the next fiscal year.

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Riding the wave of smartphone sales, Qualcomm reported strong results for its fourth quarter and the company raised its estimates for the future, in anticipation of growth in tablets and predictions of an Apple iPhone for Verizon Wireless that will likely use Qualcomm chips.

The only negative piece of the report was Qualcomm's continued uncertainty about plans for its struggling FLO TV operation.

"Our outlook includes strong revenue and earnings growth in fiscal 2011," said Paul E. Jacobs, Qualcomm's chairman and CEO, in a statement. "In the coming year, we expect continued strong growth in CDMA-based device shipments, including smartphones and other data-centric devices, driven by the global adoption of 3G and accelerating consumer demand for wireless data."

Qualcomm has been a major beneficiary of the smartphone boom and Jacobs noted that smartphone shipments surged 95% over the fourth quarter in 2009. The company's popular Snapdragon processor is used by most smartphone makers and the company said that it sold four times as many Snapdragons in its second fiscal half-year as it did in the first half.

Revenue in the quarter climbed to $2.95 billion from $2.69 billion while income rose to $865 million from $803 million year-over-year.

There are new reasons for optimism, too, as tablet sales are taking off and Qualcomm is a major supplier in that category, largely via its Snapdragon. Also looming, although not publically confirmed, is Verizon Wireless' expected launch of a CDMA iPhone in the new year. Qualcomm is expected to be a supplier when the phone hits the market.

On FLO TV, the company indicated it may take a charge as it continues to evaluate its options, which, it said "include, but are not limited to, operating the FLO TV network under a new wholesale service, (making) a joint venture with a third party, (or selling) the spectrum licenses." The company added that it could simply discontinue operation of the network.

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