Qualcomm's fiscal first-quarter earnings jump 46 percent

By: Associated Press | Wednesday, January 19, 2005 8:48 PM PST ∞

SAN DIEGO -- Qualcomm Inc. said Wednesday that upgraded wireless networks contributed to a 46 percent increase in fiscal first-quarter earnings. The chipmaker and wireless technology developer raised its profit estimate for the full year but its projection for the second quarter fell below Wall Street expectations.

Qualcomm earned $513 million, or 30 cents a share, during the three-month period that ended Dec. 26, up from $352 million, or 21 cents a share, in the same period last year. The latest period included a gain of 2 cents a share from Qualcomm Strategic Initiatives, an investment unit. The year-ago period included a charge of 4 cents a share from discontinued operations.

Revenue rose 15 percent to $1.39 billion from $1.21 billion. Qualcomm changed its method of accounting for licensing fees in September. Had the new method been in effect, revenue for the year-earlier first quarter would have been $1.15 billion.

San Diego-based Qualcomm said it shipped about 39 million mobile-phone chipsets worldwide, up from about 32 million units a year earlier.

For the fiscal second quarter, Qualcomm projected earnings -- excluding the investment unit -- of between 25 cents and 27 cents a share, compared with 26 cents a share a year earlier and below an estimated 30 cents a share among analysts surveyed by Thomson First Call.

Qualcomm projected second-quarter revenue, excluding the investment unit, between $1.35 billion and $1.45 billion, an increase of between 14 percent and 22 percent from a year earlier. It predicts shipping 35 million to 37 million mobile-phone chipsets during the quarter.

Qualcomm projected earnings for the full fiscal year of about $1.15 to $1.19 a share, including an estimated loss of a penny a share from the investment unit. In November, the company projected net income of $1.12 to $1.16 a share for the year.

Qualcomm said its fourth-quarter earnings will include more than $111 million in expenses tied to an accounting change that forces companies to begin counting stock options as expenses against profits.

The accounting rule board recently required companies to value employee stock options and record them as an expense, like other forms of compensation. The expensing standard will take effect with financial statements beginning after June 15; Qualcomm's fourth quarter ends in September.

The wireless technology company had opposed the accounting change for stock options, which allow holders the right to buy a specified number of shares at a fixed price.

Shares of Qualcomm fell $1.55, or 3.6 percent, to close at $41.07 Wednesday on the Nasdaq Stock Market. They lost another 6.5 percent, or $2.67, in after-hours trading.