Qualcomm earnings, outlook surprise
Qualcomm’s stock jumped nearly 8% after better-than-expected Q3 earnings and raising its revenue forecast.
The no.1 mobile chip vendor boosted net income 36% and revenue 10% year-on-year, with its CDMA MSM modem shipments up 22% and total device sales 14% higher.
But it hiked guidance for the coming quarter to between $3.05-$3.35 billion, 14%-25% higher, sparking a surge in its stock, which was already up 20% since August.
RBC analyst Mark Sue told Reuters investors were surprised by the result and guidance.
“The larger positive is that Qualcomm's guidance is also much better than what most people had expected, which means, I think, that many things are aligning for Qualcomm as it relates to smartphone growth, market share gains and a strong design win cycles,” Sue said.
The raised outlook was more than enough to offset an estimated hit of between $125-$175 million from its poorly-performing FLO TV service. Qualcomm suspended direct sales for FLO a month ago and said it had not yet decided what to do with the business.
It would consider operating it as a wholesale service, selling it in whole or part, or of selling off the spectrum. Failing those it will likely close the network.