Although Qualcomm Inc. lowered its expectations for W-CDMA and CDMA handset shipments, the company still managed to post results ahead of expectations. The company’s stock was up more than 6 percent on the news to $38.34 per share.
Qualcomm’s revenues for its third quarter came in at $1.36 billion, up 1 percent over the same quarter last year. Analysts polled by Thomson First Call had predicted revenues of $1.31 billion. The company’s earnings per share also came in ahead of expectations at 33 cents.
However, Qualcomm lowered its 2005 W-CDMA and CDMA handset shipment estimates, from 213 million to 203 million. The company now expects its W-CDMA chip shipments for the year to hit 45 million, down from 50 million. The company blamed the W-CDMA reduction-its second such decrease-on slower-than-expected demand in Europe.
Nonetheless, the company still expects strong growth in handset shipments in the second half of the year as lower-priced third-generation phones hit the market in time for the critical holiday shopping season. Analysts too seemed generally upbeat on the situation.
“While Qualcomm gave a slight downward revision to handset shipments for CDMA (Korea and China) and W-CDMA (Europe and the rest of the world) for fiscal-year 2005, we believe this is a temporary setback given the worldwide carrier support for the transition to 3G,” wrote Jason Tsai, an analyst with ThinkEquity Partners. The firm makes a market in Qualcomm securities.
The general goodwill toward Qualcomm likely was due to the company’s better-than-expected forecast for the rest of the year. The company raised its fiscal-year earnings-per-share guidance from a high of $1.14 to $1.15.
