Wireless chip maker Qualcomm has posted a slight drop in third quarter revenue of €1.94 billion (US$2.75 billion) but has upgraded its full year forecasts on the back of strong chipset demand.
Qualcomm said that it now anticipates fiscal year 2009 revenue of €7.25 billion to €7.34 billion, up from its previous forecast of €6.9 billion to €7.2 billion.
"Despite the global economic uncertainty, we anticipate another strong quarter for our chipset shipments in the fourth fiscal quarter. We believe the CDMA inventory channel has largely stabilized, yet remains near historically low levels consistent with our prior forecast. We are raising our fiscal 2009 revenue and operating income estimates given the strong underlying fundamentals of our business,” said Qualcomm CEO Dr. Paul E. Jacobs.
The vendor reported operating income of €628 million, compared to €579 million in the prior year and an operating loss of €7 million in the prior quarter. The Q2 loss was attributed to a €526 million litigation settlement related to a settlement and patent agreement with Broadcom Corporation.
Jacobs said that the “strong quarter” was attributed to a robust global market for the migration to 3G-enabled products and services. “Our financial results reflect a record quarter for MSM chipset shipments, strong licensing and royalty revenues based on healthy end market demand in the March quarter and a 5 percent year-over-year reduction in combined R&D and expenses."
Despite a positive overall outlook Qualcomm's time frame for delivering its first LTE silicon samples for data cards is slipping, translating to a delay until the second half of 2010 in LTE data cards reaching the market. Qualcomm had originally planned to begin sampling of its MDM multi-radio series chipsets in the second quarter of 2009, but now says it is on target to provide engineering samples in the third quarter.
Meanwhile litigation continues to plague the vendor with US regulators this week filing a lawsuit against its former Director of Strategic Marketing Analysis. Andres Leyva has been accused of allegedly trading in company stock while in possession of confidential corporate information.
The Securities and Exchange Commission (SEC) claims that Leyva made around €25,000 in illegal profits after trading on the basis of confidential information about Qualcomm's new licensing agreement with Nokia, and the settlement of litigation between the two companies.
In August, Leyva was fired for violating Qualcomm's insider trading policy. The vendor is currently cooperating with the SEC, which is seeking repayment of Leyva’s profits, plus a penalty which could be up to three times that amount.
