SAN DIEGO (dpa-AFX) - Qualcomm Inc (QCOM) on Wednesday reported a 42 percent jump in third-quarter profit, helped by demand for its chips used in smartphones, with results topping Wall Street estimates.
The mobile chip maker provided overall weak guidance for the fourth quarter, citing a slump in licensing business; but lifted earnings expectations for 2014, on strength in semiconductor business.
Qualcomm shares were down more than 3 percent in after-hours trade on the Nasdaq.
Qualcomm provides baseband chips, which connect phones to cellular networks, to leading smartphone makers; and licenses its code division multiple access technology.
Although the company has gained from demand for smartphones in developed markets, focus is shifting to China and other countries where consumers prefer cheaper devices.
For the third quarter, San Diego, California-based Qualcomm posted net earnings of $2.24 billion or $1.31 per share, compared with $1.58 billion or $0.90 per share last year.
Excluding items, adjusted earnings for the quarter were $1.44 per share. On average, 34 analysts polled by Thomson Reuters expected earnings of $1.22 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the third quarter climbed 9 percent to $6.81 billion from $6.24 billion in the prior year, topping analysts' expectations of $6.52 billion.
Qualcomm CEO Steve Mollenkopf said results reflect broad-based demand for its industry-leading 3G/4G chipset solutions.
The company shipped 225 million modem chips in the quarter, up 31 percent from last year.
For the fourth quarter, Qualcomm projects adjusted earnings of $1.20 to $1.35 per share and revenues of $6.5 billion to $7.4 billion. Analysts currently expect earnings of $1.39 per share on revenues of $7.15 billion for the quarter.
For fiscal year 2014, Qualcomm now expect adjusted earnings of $5.21 to $5.36 per share, from prior range of $5.05 to $5.25 per share; and revenues of $26.3 billion to $27.2 billion, from prior range of $26 billion and $27.5 billion.
Analysts currently expect earnings of $5.17 per share on revenues of $26.66 billion for the year.
Among others in the industry, Texas Instruments Inc (TXN)recently reported better-than-expected increase in quarterly earnings, helped by an 8 percent growth in revenues. The company provided strong guidance for the current quarter.
Qualcomm closed Wednesday at $81.60, up $0.07 or 0.09%, on a volume of 7.7 million shares. In after hours, the stock dropped $2.60 or 3.19%.
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