SAN FRANCISCO—Chip vendor Qualcomm Inc. Wednesday (Feb. 1) reported record quarterly results that topped analysts' expectations, but revealed that the company is being investigated for compliance with the U.S. law governing foreign business practices.
Qualcomm (San Diego) said it learned last week that the U.S. Attorney's office in San Diego and the U.S. Dept. of Justice have begun a preliminary investigation into the company's compliance with the Foreign Corrupt Practices Act of 1977 (FCPA), which sets out accounting transparency requirements for U.S. companies doing business abroad and forbids bribery of foreign officials. The U.S. Securities and Exchange Commission has also questioned Qualcomm on the topic, the company said.
"We believe we are in compliance with the requirements of the FCPA, and we will continue to cooperate with this investigation and look forward to resolving this matter," said Paul Jacobs, Qualcomm's chairman and CEO, in a conference call with analysts following the company's quarterly report.
Qualcomm reported quarterly sales of $4.68 billion, up 14 percent from the previous quarter and up 40 percent compared to the same period of 2010. The company reported a net income for the quarter of $1.4 billion, up 33 percent from the previous quarter and up 20 percent from the year-ago quarter.
On a pro forma basis, excluding charges, Qualcomm reported a net income of $1.67 billion, up 22 percent sequentially and up 24 percent year-over-year. The pro forma net income equates to 97 cents per share, up 21 percent sequentially and up 18 percent year-over-year.
Qualcomm's sales and profit for the quarter beat consensus analysts' expectations, which called for sales of $4.58 billion and pro forma earnings of 90 cents per share, according to Yahoo Finance.
"We're very pleased to report record revenues, earnings per share and MSM shipments this quarter driven by increased demand for smartphones and data-centric devices across an expanding number of regions and price points," Jacobs said. "It was a very successful quarter, and we're pleased to be raising our financial outlook for fiscal 2012."
Qualcomm said it expects sales for the current quarter to be between $4.6 billion and $5 billion. This would represent a year-to-year increase of 19 to 29 percent, the company said. The company said it expects to report earnings for the quarter of $1.20 to $1.26, an increase of 103 to 114 percent over the year-ago period.
Qualcomm's sales guidance for the current quarter beat consensus analysts' expectations of $4.51 billion, according to Yahoo Finance.
On the strength of a strong fiscal first quarter and high expectations for the current quarter, Qualcomm also raised its guidance for the fiscal year, which closes in late December. The company said it now expects sales for the fiscal year to be between $18.7 billion and $19.7 billion, up from a previous estimate of $18 billion to $19 billion. The company now expects to report earnings per share for the fiscal year of between $3.36 and $3.56, up from a previous forecast of $2.80 to $3 per share.
Jacobs outlined four key drivers for Qualcomm's business going forward, including continued strong demand for smartphones across all regions, growth in China's wireless subscriber base, 3G and 4G adoption in media tablets, e-readers and other non-handset devices and opportunities for the company's Snapdragon applications processors in the mobile computing and consumer electronics space.