Qualcomm posts lower profit, cuts revenue forecast

Qualcomm lowered its revenue estimate and declined to update its earnings forecast as it reported a steep fall in profit.

Qualcomm lowered its revenue estimate and declined to update its earnings forecast as it reported flat revenue and a steep decline in profit for its fiscal first quarter.

The mobile technology company's revenue for the quarter ended in December was US$2.52 billion, up 3 percent from a year earlier but down 25 percent from the previous quarter. Net income plummeted 56 percent to $341 million, or $0.20 per share. Qualcomm said the profit was slammed by the falling value of marketable securities held by the company.

Looking forward, the company forecasts falling revenue. It expects second-quarter revenue to come in between $2.25 billion and $2.45 billion, down between 6 percent and 14 percent from a year earlier. Qualcomm slashed an earlier forecast for the full 2009 fiscal year to between $9.3 billion and $9.8 billion, representing a drop of 12 percent to 16 percent from fiscal 2008. The company wouldn't update its earlier earnings forecast, which called for fiscal-year earnings per share of $2.00 to $2.10.

That doesn't mean Qualcomm expects people will stop buying 3G handsets: Counting both CDMA2000 and Wideband CDMA (Code Division Multiple Access), Qualcomm expects between 540 million and 590 million devices to ship in 2009, up 20 percent from a year earlier. But the company does expect average selling prices to fall, as China and other developing countries make up a larger part of the 3G device market. Qualcomm bases much of its business on chipsets and technology licenses for CDMA, which the company partly developed.

"I'm very pleased with the performance of our core operating business in this difficult environment," CEO Paul Jacobs said on a conference call following the financial report. "The worldwide market for 3G remains vibrant," he said later. Jacobs said he believed the faltering investments that hurt Qualcomm's bottom line will recover their value over time, but he didn't try to forecast when the economy would recover.

The company is holding down its costs, increasing research and development and selling, general and administrative expenses by about 3 percent instead of the previously planned 10 percent. But development continues on key product initiatives. A multimode chip for 4G LTE (Long-Term Evolution), EV-DO (Evolution-Data Optimized) and HSPA (High-Speed Packet Access) is on track to ship in sample quantities in the fiscal second quarter. And the MSM (Mobile Station Modem) 7000 chip for smartphones will go into 20 devices based on Google's Android platform, as well as more than 40 Windows Mobile products and Research In Motion's BlackBerry Storm smartphone, Qualcomm said.

The company believes it is well-positioned to capture the emerging 3G market in China, which finally issued 3G licenses to carriers earlier this week. Qualcomm has license agreements with more than 30 companies in China, 10 of which were set in the past 12 months, the company said.

After the earnings report, Qualcomm shares on the Nasdaq (QCOM) were down $2.11 at $34.71 in after-hours trading late Wednesday.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags qualcommfinancial results

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?