Qualcomm predicted its fiscal second-quarter profit and revenue would be at the high end of estimates. Despite the buoyant outlook, the company's top executives faced off with shareholders frustrated that the chip maker's stock was not worth more.
"We're very pleased with progress to date and trends for the quarter," Qualcomm CFO Bill Keitel said at the company's annual shareholder meeting. In January, the firm said it expects second-quarter sales to be between $2.4 billion and $2.6 billion. The announcements came a day after Qualcomm announced a $3 billion share buyback plan and said it would raise its quarterly dividend.
Qualcomm, the largest supplier of mobile phone chips in the world, is usually seen as a benchmark for how the handset industry is trending. Most analysts expect overall handset sales to be up this year after declining in 2009.
Despite the optimistic forecast from Qualcomm, investors were exasperated with Qualcomm's share price. "In 2001, the stock was $45, and today it's $37," one shareholder said, according to the San Diego Union-Tribune. "With the kind of company Qualcomm is, this stock should be a lot higher than $37. It is astounding to me."
Qualcomm CEO Paul Jacobs responded by noting that he, too, was surprised, given the stronger financial position Qualcomm is in today. "The only thing we can do is continue to return value to shareholders through dividends and share buybacks, and continue to drive the business forward," Jacobs said. "But we share your frustration."
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