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It certainly has been a chipper week for cellphone companies and component makers, with Qualcomm the latest firm to announce some rather stellar fiscal third-quarter earnings, thanks largely to the whopping success of Android smartphones based on the firm’s chips.
Qualcomm reported $767 million in earnings for the quarter, translating into 47 cents a share, up from $737 million – 44 cents a share – this time last year.
The San Diego based chipmaker beat the street’s estimates by earning 57 cents per share overall, just above the 54 cents a share predicted by Thomson Reuters and the gang.
Revenue, Qualcomm admitted, had slid somewhat, going from $2.75 billion this time last year to $2.71 billion this quarter, but that too beat analyst predictions of a paltry $2.63 billion.
The fact it hadn’t slipped further was a relief for many who feared that tumbling device prices would take a tough toll on component makers, but a continuing global push towards 3G and 4G in the near future has stimulated demand for more powerful chips.
Indeed, Qualcomm gets much of its millions (or rather billions) from handset royalty deals which tend to represent a percentage of the total device price.
What this means for the immediate future is unclear, but Qualcomm certainly seemed confident, even to the point of raising its guidance for revenue and earnings growth for the remainder of 2010.
“Looking forward, we continue to see healthy CDMA-based device growth of approximately 23% in calendar year 2010, and are raising both our revenue and earnings guidance for the fiscal year,” said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm.
Google’s Android has also given Qualcomm a boost up the backside, with optimal use of the operating system coming from powerful 1Ghz processors, like Qualcomm’s Snapdragon. Indeed, both the popular HTC Incredible and EVO use Qualcomm’s chips to provide users with a blazingly fast experience.
“Our financial performance this quarter exceeded our prior expectations, driven by record MSM chipset shipments, favorable product mix and continued strong demand for 3G devices around the world,” continued Jacobs.
The only thing Jacobs seemed unhappy with on Wednesday was the flop that is FLO TV, Qualcomm’s flailing cellphone video service which simply does not seem to want to take off, no matter how much money the firm sinks into it.
Kicking off the acquisition rumor mill, Jacobs told analysts Qualcomm was now “considering alternatives” for Flo, citing discussions with a number of unnamed partners.
Soon after announcing its fiscal results, Qualcomm saw its shares increase by 3.4% to $37.42.
