SAN FRANCISCO—Fabless chip vendor Qualcomm Inc. Wednesday (Jan. 26) raised its sales target for the fiscal year after reporting record quarterly sales that beat analysts' expectations.
Qualcomm (San Diego) said it now expects revenue for the fiscal year to be between $13.6 billion and $14.2 billion, up from a previous range of $12.4 billion to $13 billion. The company also announced that it resolved a previously disclosed licensee dispute, but did not name the licensee or describe the terms of the settlement.
Qualcomm reported sales of $3.3 billion for its fiscal first quarter, ended Dec. 26, up 13 percent sequentially and 25 percent year-to-year. The company reported a net income for the quarter of $1.17 billion, or 71 cents per share, up 35 percent sequentially and up 39 percent year-to-year.
"We are very pleased to report record revenues, earnings per share and MSM chipset shipments this quarter driven by increased demand for smartphones and data-centric devices across an expanding number of regions and price points," said Paul Jacobs, Qualcomm's chairman and CEO, in a statement.
On a pro forma basis, excluding charges, Qualcomm reported a net income of $1.35 billion, or 82 cents per share, up 22 percent sequentially and up 29 percent year-to-year.
Qualcomm's quarterly numbers beat consensus analysts' expectations, which called for sales of $3.2 billion and pro forma earnings per share of 72 cents, according to Yahoo Finance.
Qualcomm said it shipped 118 million Mobile Station Modem (MSM) units during the quarter, an increase of 6 percent sequentially and 28 percent year-to-year.
During a conference call with analysts following the quarterly report, Qualcomm executives said the company's Snapdragon applications processor is currently being designed into more than 50 products, including more than 20 media tablets.
For the current quarter, Qualcomm said it expects sales to be between $3.45 billion and $3.75 billion, which would represent an increase of 30 to 41 percent year-to-year. The company expects to report earnings of 50 to 54 cents per diluted share in accordance with generally accepted accounting principles, which would be an increase of 9 to 17 percent.
Craig Berger, an analyst with FBR Capital Markets, said Qualcomm's upside is largely driven by stronger MSM chipset units and prices, and stronger device units as smartphones make up more of the mix.
Berger said Qualcomm has not disclosed the identity of the vendor that it settled the licensee dispute with. Berger said he would guess the company is a smaller, Chinese white box OEM. Qualcomm noted that it also has an ongoing licensee dispute with Panasonic.
Berger added that Qualcomm's recently announced $3.1 billion acquisition of Atheros Communications Inc. should bolster the company over the long run.
"Qualcomm’s recently announced acquisition of Atheros is a strategic shift for the firm, which now aims to be a merchant arms dealer of a number of connectivity and networking chips," Berger wrote in a report circulated Thursday.
"Qualcomm is squarely taking aim at Broadcom’s dominance in chip markets including Wi-Fi, Bluetooth, GPS, combo connectivity, ethernet switch, GPON optical networking, and powerline, among others," Berger said. "Five to eight years from now we would not be surprised to see Broadcom and Qualcomm (and possibly Marvell or TI) as dominant in these markets, with most other competitors meaningfully less successful given the vast amounts of IP and scale needed to develop and bring to market uber-integrated devices at 28-nm, 22-nm, and beyond."