NEW YORK/WASHINGTON (Reuters) - Wireless chipmaker Qualcomm Inc. <QCOM.O> on Thursday raised its estimates for the current quarter, but a new investigation related to a patent dispute showed it was still mired in legal woes.
By Ritsuko Ando and Diane Bartz
NEW YORK/WASHINGTON (Reuters) - Wireless chipmaker Qualcomm Inc. <QCOM.O> on Thursday raised its estimates for the current quarter, but a new investigation related to a patent dispute showed it was still mired in legal woes.
For its fiscal first quarter ending December 30, the company expects adjusted earnings per share of 52 cents to 53 cents, compared with its previous forecast of 50 cents to 52 cents and year-ago earnings of 43 cents.
Qualcomm also said it expects revenue at the high end of its previous outlook of $2.3 billion to $2.4 billion.
!ADVERTISEMENT!The announcement lifted the company's shares by 84 cents, or 2.19 percent, to $39.12. It also helped shares in rival Broadcom <BRCM.O> rise 48 cents, or 1.82 percent, to $26.84.
Qualcomm is the developer and top supplier of CDMA, a wireless technology used widely in the United States. It also sells licenses and chips for mobile phones running on WCDMA, a standard used in Europe.
"Demand for CDMA-based devices and services continues to accelerate at a rapid pace," Chief Executive Paul Jacobs said in a statement.
The company said it expects to ship around 78 million in "mobile station modem" chips, or chips used in wireless phones, during the quarter. It previously forecast shipment of 74 million to 78 million units.
Bank of America analyst Tim Long said that was slightly above his forecast of 76 million.
"This is likely due to the strong quarter we are seeing from Samsung, HTC and others," Long said in a report, reiterating a "buy" and price target of $54. South Korea's Samsung Electronics Co. <005930.KS> and Taiwan smartphone maker High Tech Computer (HTC) Corp. <2498.TW> are Qualcomm customers.
LEGAL WOES
Despite expectations of growth from advanced phones, however, the company's shares were mostly flat from a year earlier, as legal battles with companies such as Nokia <NOK1V.HE> and Broadcom weigh on investor sentiment.
A U.S. trade agency said on Thursday it would investigate charges by rival Broadcom that Qualcomm was violating an order not to import chips that infringed on a Broadcom patent.
In June 2007, the U.S. International Trade Commission, which hears patent cases involving imports, banned the U.S. sales of some cell phone models that contain Qualcomm chips that infringe on the patent.
Broadcomm complained to the ITC in November that Qualcomm had violated the order.
The ITC said in a statement it would "institute formal enforcement proceedings to determine whether Qualcomm is in violation of the commission's cease and desist order issued in the investigation and what, if any enforcement measures are appropriate."
Qualcomm said it excluded from royalties it believes Nokia should pay from the first quarter estimates.
It also said it did not expect recent volatility in credit markets to affect its financial outlook for the first quarter.
(Editing by Steve Orlofsky, Leslie Gevirtz)
