Qualcomm Profit Miss Estimates, Guidance Weak; Stock Down

(RTTNews) - Mobile chip maker Qualcomm Inc (QCOM) Wednesday reported a 26 percent rise in fourth-quarter profit, led by a 3 percent increase in revenues, even as both earnings and revenue still fell short of Wall Street estimates.

Qualcomm provided some weak outlook for the first quarter and full year 2015, as the company grapples with licensing problems in China.

Following the announcement, Qualcomm shares slid 6 percent in after-hours trade on the Nasdaq.

The disappointing fourth-quarter results were expected as the company had warned of a slump in licensing business.

The company had disclosed problems with licensee and others in China, and has been under a probe by a Chinese government agency due to monopoly concerns.

CEO Steve Mollenkopf said that while Qualcomm expects growth in global 3G/4G device shipments in calendar year 2015, mainly in emerging markets, its outlook is tempered by the issues it faces in China related to licensing business.

Qualcomm, based in San Diego, California-based, posted quarterly net earnings of $1.89 billion or $1.11 per share, compared with $1.5 billion or $0.86 per share last year.

Excluding items, adjusted earnings for the quarter were $1.26 per share, compared with $1.05 per share a year ago.

On average, 28 analysts polled by Thomson Reuters estimated earnings of $1.31 per share for the quarter. Analysts' estimates typically exclude special items.

Qualcomm provides baseband chips, which connect phones to cellular networks, to leading smartphone makers and licenses its code division multiple access technology.

Revenues for the fourth quarter rose 3 percent to $6.69 billion from $6.48 billion in the prior year. Twenty-seven analysts had a consensus revenue estimate of $7.02 billion for the quarter.

Qualcomm shipped 236 million modem chips for the fourth quarter, up 24 percent from a year ago.

For the first quarter, Qualcomm expects adjusted earnings of $1.18 to $1.30 per share on revenues of $6.6 billion to $7.2 billion. Analysts currently expect earnings of $1.43 per share on revenues of $7.4 billion for the quarter.

For the full year 2015, the company projects adjusted earnings of $5.05 to $5.35 per share on revenues of $26.8 billion to $28.8 billion. Analysts currently expect earnings of $5.58 per share on revenues of $28.9 billion for the year.

In October, Qualcomm agreed to buy UK-based CSR Plc. (CSRE, CSRXF.PK, CSR.L) for about 1.56 billion pounds or nearly $2.5 billion. Qualcomm said the deal is part of strategic priorities in its growing business areas of Internet of Everything and automotive infotainment.

Qualcomm expects the deal to be accretive to adjusted earnings fiscal 2016.

Qualcomm closed Wednesday at $77.20, up $0.09 or 0.12%, on a volume of about 11 million shares. In after hours, the stock dropped $4.60 or 5.96% at $72.60. In the past year, the stock trended in the range of $66.25 - $81.97.