Earnings Jump at Cellphone Chip Firm
Cellphone chip maker Qualcomm Inc. said Wednesday that profit in its fiscal second quarter more than quadrupled as more companies used its chips and wireless data transmission technology.
San Diego-based Qualcomm earned $488 million, or 58 cents a share, in the period ended March 28, up from $103 million, or 13 cents, a year ago. Sales rose 20% to $1.2 billion from $1 billion, thanks to the greater acceptance in the U.S. and overseas of CDMA mobile phone technology, for which Qualcomm owns the essential patents.
For the record:
12:00 a.m. April 24, 2004 For The Record
Los Angeles Times Saturday April 24, 2004 Home Edition Main News Part A Page 2 National Desk 1 inches; 31 words Type of Material: Correction
Qualcomm -- An article in Thursday’s Business section about cellphone chip maker Qualcomm Inc.’s second-quarter earnings incorrectly identified the company’s chief financial officer as David Keitel. His first name is William.
The results were aided by sales growth around the world -- especially in Japan and South Korea -- and by U.S. consumers migrating to wireless carriers that use code division multiple access, such as Verizon Wireless and Sprint PCS. Companies that rely on the older time division multiple access technology, such as AT&T; Wireless Services Inc., are losing customers.
“Their dominance as the inventor of CDMA is absolutely the reason they did so well,” said Albert Lin, an analyst with equities research and brokerage firm American Technology Research. “It’s the fastest-growing technology, and on top of that, the overall growth rate in the cellular phone market is much higher than people thought.”
Qualcomm executives expressed optimism about the current quarter and the full year. Chief Financial Officer David Keitel told analysts that he expected revenue this quarter to be 41% to 44% higher than in the same period last year, with earnings per share rising to 46 to 48 cents, compared with 33 cents last year.
Keitel also raised guidance for the full fiscal year, which ends Sept. 30. Sales are now expected to be 26% to 29% higher than last year, with a per-share profit of $1.86 to $1.91, up from $1.01.
Qualcomm shares, which gained $1.41 to $65.84 on Nasdaq, rose to $67.20 in after-hours trading.
Qualcomm will soon introduce technology to enable photos, video and other data to be sent to cellphones. Consumers will be able to receive alerts when new content is available, such as commentary on a stock or a highlight from a sporting event, said Paul Jacobs, president of Qualcomm’s Wireless and Internet Group.
“Multimedia delivery to handsets will be a significant driver for [cellphone] carriers,” Jacobs said in a conference call with financial analysts.
