Qualcomm, a developer of wireless technology and the second-largest maker of chips for cell phones in the world, raised its earnings forecast for the third quarter, saying that consumer demand had been higher than expected for cell phones that can browse the Web, send video and download music.
The San Diego company said it expected revenue for the quarter ending June 25 to range from $1.91 billion to $1.96 billion, up from previous guidance of $1.77 billion to $1.87 billion.
The company said earnings per share, which excludes certain investments and other items, would be 41 cents to 42 cents a share, compared to its previous estimates of 38 cents to 40 cents.
Qualcomm shares closed at $41.84 yesterday on the Nasdaq, up 65 cents, or about 1.6 percent.
Qualcomm's earnings outlook is generally viewed by analysts as a bellwether for the wireless industry.
Last week, Dallas-based Texas Instruments, the world's largest maker of chips for cell phones, also raised its forecast.
Demand for handsets using Qualcomm's WCDMA technology, or wideband code division multiple access, are exceeding the company's expectations, as are the prices, said Qualcomm chief executive Paul Jacobs said in a statement.
“The change in Qualcomm's guidance reflects a strong start to the year in WCDMA handset sales in western Europe,” said Michael Walkley, a senior research analyst for Piper Jaffray & Co. in Minneapolis.
Qualcomm not only sells chips that run cell phones but also receives royalties on the sales of cell phones that use its wireless technology. About one in five cell phones use Qualcomm's technology now, but the next generation of cell phones will all use it, to one extent or another.
The company said it expected to collect royalties this quarter on the sales of 65 million to 66 million cell phones, up from its previous estimate of 62 million to 64 million. The average selling price of a cell phone using Qualcomm's technology is expected to be $213, up from a previous estimate of $203, the company said.
Kathryn Balint: (619) 293-2848; kathryn.balint@uniontrib.com
