Qualcomm’s Q2 income more than doubles
Mobile phone chipmaker Qualcomm said Wednesday that its fiscal second-quarter profit more than doubled as strong demand for smartphones boosted its sales; its revenue and adjusted profit beat Wall Street's expectations.
But the company said it expects its costs to increase as it makes more chips, and it predicted third-quarter and full-year earnings below the average expectation of analysts polled by FactSet.
Its shares fell more than 3 percent after hours.
Qualcomm said its net income was $2.23 billion, or $1.28 per share, for the quarter that ended March 25. That's compared with $999 million, or 59 cents per share, a year earlier. The company had slightly more shares outstanding in the most recent quarter.
Revenue was $4.94 billion, up 28 percent from $3.87 billion in the same period a year earlier.
The company said its adjusted net income, excluding one-time items like stock-based compensation, was $1.01 per share. That beat analysts' expectations for adjusted net income of 95 cents per share on $4.83 billion in revenue, according to a survey by FactSet.
CEO Paul Jacobs said Qualcomm's revenue benefited from growing global demand for new 3G- and 4G-enabled devices like smartphones and tablet computers. But he said the cost of making more 28 nanometer chips could cut into profit margins the rest of the fiscal year.
Qualcomm expects adjusted net income of 83 cents to 89 cents per share and revenue of $4.45 billion to $4.81 billion for the third quarter.
The earnings estimate is short of analysts' average forecast, according to FactSet, for adjusted earnings of 90 cents per share, and the company's expected revenue range is largely below the average estimate from analysts for $4.81 billion.
For the full year, the company said it expects to earn adjusted net income between $3.61 per share and $3.76 per share. That's under the $3.78 per share that analysts expected.
Qualcomm expects full-year revenue of $18.7 billion to $19.7 billion. Analysts expect $19.54 billion on average.
Shares dropped $2.29, or 3.4 percent, to $64.70 in after-market trading. In regular trading, the stock had lost 25 cents to close at $66.99.
Qualcomm shares have traded between $45.98 and $68.87 over the past year.