Qualcomm posts higher profit, raises outlook

Reuters reports that Qualcomm "posted an 11 percent rise in quarterly earnings and raised its 2006 profit outlook to match Wall Street forecasts, citing strong demand for its wireless chips and technology, particularly in Europe." The second-quarter earnings were in line with expectations but some "investors were concerned about Qualcomm's announcement that it is in talks with Nokia about extending a licensing agreement that expires on April 9, 2007."

Deutsche Bank analyst Brian Modoff said, "I think Qualcomm has some leverage over Nokia but it's not in its best interest to let it go beyond that day." Modoof added that "any uncertainty could upset customers and investors."

According to Qualcomm, "net profit rose to $593 million, or 34 cents a share, in its fiscal second quarter, from $532 million, or 31 cents a share in the year-ago quarter. Revenue rose 34 percent to $1.83 billion from $1.37 billion a year earlier."

Qualcomm also raised forecasts for "total W-CDMA handset sales in calendar year 2006 to 96 million from its earlier view of 86 million. It expects 2006 W-CDMA and CDMA handset shipments of 283 million, up from its earlier view of 262 million."

Harris Nesbitt analyst John Bucher said, "The results and the outlook is pretty much along what we were modeling so no surprise there."