Qualcomm posts jump in profit, revenue, points to LTE strength and upcoming device wins

Qualcomm (NASDAQ:QCOM) posted gains in profit and revenue in its fiscal third quarter, and also raised its guidance for the full fiscal year thanks in part to growing demand for LTE devices and its Snapdragon chipsets. The company said it now has at least 500 Snapdragon-powered smartphones in the works.

For the quarter that ended June 30, Qualcomm posted net income of $1.58 billion, up 31 percent from $1.21 billion in the year-ago period. The company also reported that revenue climbed to $6.24 billion, up 35 percent year-over-year and 2 percent sequentially. Qualcomm also said that MSM chip shipments clocked in at 172 million units for the quarter, up 22 percent year-over-year and down 1 percent sequentially.

Qualcomm derives a great deal of revenue from companies licensing its technologies, especially CDMA, and reports figures on the units shipped and average selling prices of those devices from the prior quarter to calculate its licensing revenue. CFO George Davis said average and sales volumes were stronger than expected.

In the March quarter, Qualcomm said it tabulated an estimated 244 to 248 million unit shipments of 3G/4G devices at an estimated average selling price of $227 to $233 per unit, higher than the $214 to $220 in the quarter ended in December.

"The royalty business remains healthy and defensible, generating significant operating income and Qualcomm's well positioned to benefit from the TD-LTE ramp in China in 2H13," RBC Capital Markets analyst Mark Sue wrote in a research note. "Chipset units are growing, however, QCT margins have declined from the 25.9% levels in F4Q12 to Qualcomm's QCT margin expectation of 16%-17% for F4Q13."

For the full fiscal year, Qualcomm bumped its revenue guidance to $24.3 billion to $25 billion, up from a previous range of $24 billion to $25 billion. "There's still very broad-based demand for smartphones and for chips," Davis told Bloomberg. "You've got a tremendous growth engine in the developing markets and you're still seeing good growth in developed markets."

Indeed, While Qualcomm is pushing its high-end Snapdragon 800 chipsets in developed markets in devices like Samsung Electronics' new Galaxy S4, capable of using carrier aggregation technology in LTE Advanced standards, the silicon maker is also looking to promote its lower-end Snapdragons chips in emerging markets like China and India.

"We are very excited about the types of devices that are going to come out," Qualcomm Technologies Executive Vice President Murthy Renduchintala told AllThingsD. He said at least 500 Snapdragon-powered smartphones and 40 tablets are in the works. Renduchintala also said Qualcomm will have more announcements geared toward emerging markets by year-end. "The holiday season is going to be a very exciting period for us," he said.

For more:
- see this release
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this AllThingsD article

Special Report: Wireless in the second quarter of 2013

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