Qualcomm (QCOM:Nasdaq) is going to wipe out existing first-quarter earnings and revenue estimates thanks to strong sales of cell-phone chips. The news lifted its shares $2.84, or 6.4%, to $47.31 on the Instinet premarket session.
Qualcomm said Thursday it will earn 47 cents or 48 cents a share in the quarter ending in December on sales that are 11% or 12% higher than last year. The estimate excludes the company's venture capital arm, which is expected to post a loss. Analysts had been forecasting earnings of 38 cents a share on that basis.
The new estimate reflects shipment of 32 million to 33 million mobile station modem phone chips during the quarter. The company had previously forecast earnings of 37 cents to 40 cents a share on a 1% to 6% decrease in year-over-year revenue, and shipment of 27 million to 28 million of the phone chips.
Qualcomm's other line of business is the licensing of its code-division multiple access algorithms for cellular network products. The company said royalty reports from licensees indicate sales of approximately 31 million new CDMA subscriber units in the fourth quarter, compared to its previous estimate of 26 million units. The company also said the average selling price of new CDMA units increased slightly compared to the third fiscal quarter and that it now expect total new CDMA subscriber units shipped in calendar 2003 to be 110 million to 112 million units.
"We are seeing stronger growth than anticipated in all CDMA markets as operators continue to deploy and expand 3G networks," the company said, adding that sales of phones with color screens, digital cameras and GPS technology helped lift the average selling price.
Based on orders to date and current customer projections, Qualcomm expects to ship 26 million to 30 million phone chips in the March quarter, compared with roughly 28 million in the year-ago period.
East Bay, QCOM just jumped out of its box. I don't think you will see any available at sub-$45 prices for a while. If I were willing to wait for a bargain, I would hunt around $46.20 or so.
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