Qualcomm reported revenues at the high end of its previous guidance, though the company's profits came in slightly lower than those from last year. The company said that its CDMA inventory channel has largely stabilized, another sign that the chip market might be in the process of turning around.
And in separate but related news, antitrust regulators at the South Korean Fair Trade Commission fined Qualcomm $208 million for engaging in "unfair" business practices related to its chipset sales.
The cellphone chip maker posted net income of $737 million, down 1.5 percent from the year-ago quarter, when it had net income of $748 million, but up substantially from a loss of $289 million in the previous quarter. During that quarter the company negotiated an $891 million settlement with longtime rival Broadcom, which effectively ended all patent litigation between the two companies and resulted in a $748 million charge on Qualcomm's earnings.
Qualcomm had revenue of $2.75 billion, down slightly from $2.76 billion a year ago but up nearly 12 percent from $2.46 billion in its fiscal second quarter. In June, Qualcomm had boosted its revenue forecasts based on increased demand, and had forecasted revenue of $2.67 billion to $2.77 billion. The company said that its financial results benefited partly from strong licensing and royalties revenues.
Qualcomm CEO Paul Jacobs said in a statement that the company expected strong continued demand for chipsets in the next quarter, and that it was raising its fiscal 2009 revenue and operating income estimates. The company projected that between 127 million and 132 million 3G handsets will be sold in the current quarter, up as much as 11 percent from the year-ago quarter.
As for the South Korean fine, the fee is the largest imposed on a single company by the Fair Trade Commission since 2005. The company said it disagreed with the ruling and would appeal it in South Korean court. "When licensing its CDMA mobile technology, Qualcomm imposed higher royalties on handset makers that use modem chips provided by its rival companies," the commission said.
Qualcomm's stock was down around 4 percent to around $46 per share in trading today.
For more:
- see this release
- see this WSJ article (sub. req.)
- see this WSJ article (sub. req.)
- see this release
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