Qualcomm posts 14% hike in profit

Qualcomm posted a strong fourth quarter as revenues spiked to $2 billion and profits increased 14 percent. The chipmaker beat the Street since expectations for revenue averaged out to $1.9 billion. Continued growth in WCDMA technology in emerging markets and steady increases in 3G service uptake (as 3G handsets come down in price) contributed greatly to the sunny quarter. New chip designs are helping the company drive down the low end of the 2G market, helping Qualcomm to continue to milk 2G.

Despite all the good news, the spat with Nokia is taking a toll. Nokia has been Qualcomm's most important handset customer to date, and the two are currently locked in negotiations over a renewal of contract that is set to expire in April. Things got ugly when the companies began suing each other: Qualcomm sued Nokia for alleged patent infringement and Nokia joined a group of companies in Europe to file anti-trust claims against Qualcomm. The potential loss of the contract added to the quickly growing legal fees make for a conservative next two years for the company. Qualcomm said failure to renew the contract could reduce its earnings by four cents to six cents a share for the quarter ending September 2007.

For more on Qualcomm's Q4:
- see this WSJ article (sub. req.)

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