Qualcomm Inc. (NASDAQ: QCOM), the world largest phone-chip maker, is scheduled to release its fiscal fourth quarter earnings after the closing bell on Wednesday, November 3, 2010. Analysts, on average, expect the company to report earnings of 59 cents per share on revenue of $2.85 billion. In the year ago period, the company reported earnings of 64 cents per share on revenue of $2.68 billion.
Qualcomm Inc. engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services. The company operates in four segments: Qualcomm Code Division Multiple Access Technologies, Qualcomm Technology Licensing, Qualcomm Wireless and Internet, and Qualcomm Strategic Initiatives.
Thanks in part to a surge in demand for mobile phones and computers, worldwide semiconductor sales reached a record $26.5 billion in September, up 2.9 percent from the prior month, the Semiconductor Industry Association said recently. Sales for the third quarter of 2010 amounted to $79.4 billion, a 6.1% increase from the previous quarter when sales were $74.8 billion. Third quarter sales were 26.2% higher than the $62.9 billion for the like period in 2009. The SIA expects sales of microchips will rise 28 percent to $290.5 billion this year.
In the preceding fiscal third quarter, the San Diego, California-based company's net income was $767 million, or 47 cents a share, compared $737 million, or 44 cents a share, in the comparable period last year. On an adjusted basis, the company earned 57 cents a share. Revenue slipped to $2.71 billion from $2.75 billion. Analysts, on average, expected the company to report earnings of 54 cents per share on revenue of $2.63 billion.
At its last earnings call in July, the company lifted its full-year financial outlook. For full year 2010, the company expects earnings on a GAAP basis to be in the range of $1.82 to $1.86 per share and revenues in the range of $10.70 billion to $11.0 billion. It had previously forecast GAAP earnings to be in the range of $1.71 to $1.82 per share and revenues to be in the range of $10.4 billion to $11 billion. On a pro forma basis, the company expects earnings to be in the range of $2.33 to $2.37 per share and revenues in the range of $10.7 billion to $11 billion. It had previously estimated earnings between $2.21 to $2.32 and revenues between $10.4 billion to $11 billion. The company expects CDMA based device growth of approximately 23% in calendar year 2010
The company expects fourth quarter earnings on a GAAP basis to be in the range of 39 cents or 43 cents per share. On a pro forma basis, earnings are anticipated in the range of 55 cents to 59 cents per share. Revenue is expected to be in the range of $2.67 billion to $2.93 billion. The company expects MSM shipments to increase to approximately 106 million to 111 million units during fiscal fourth quarter, driven primarily by greater demand for smartphones and strength in China and North America. The guidance still appears to be conservative, given the accelerated growth in smartphone market, rising CDMA penetration and increased 3G adoption in emerging markets.
According to market research firm iSuppli, smartphone shipments smartphone shipments will rise 105% to 506 million units in 2014 from 246.9 million in 2010. According to Informa, one in every five phones sold globally in 2010 will be a smartphone. By 2012, approximately one in every three is projected to be a smartphone. The company's next-generation snapdragon platform is making tremendous progress. Qualcomm's chipsets are used in majority of Android-based smartphones. A number of groundbreaking devices like Google's Nexus One, the HTC Incredible, Sprint's EVO 4G and the Dell Streak tablet are powered by Snapdragon processor.
Qualcomm also stands to benefit from growing demand for 3G data services. The company collects a royalty for every 3G device sold worldwide. In addition, it holds patents on CDMA technology and earns royalties on all CDMA mobile phone sales.
Among other developments, Qualcomm recently acquired iSkoot Technologies Inc., a newly-formed corporation that has recently received substantially all of the assets of iSkoot, Inc.
In terms of stock performance, Qualcomm shares have lost nearly 3 percent since the beginning of the year.
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