Qualcomm Inc beat Wall Street expectations for its fiscal first-quarter earnings and revenue and raised its financial targets for 2013 due to growing demand for smartphones and high-speed wireless services.
Qualcomm shares rose 6 percent in late trade on Wednesday as the outlook from the leading supplier of chips for cellphones wowed investors in contrast with sluggish demand at chip makers such as Texas Instruments and Broadcom Corp.
The company, which also announced the retirement of its chief financial officer on Wednesday, said it was seeing strong growth in emerging markets such as China and Latin America.
But outgoing CFO Bill Keitel said on the company's conference call with analysts that the outlook also reflects macro economic weakness.
"Given continued global macroeconomic uncertainties, we are continuing to maintain a cautious outlook for the year ahead," said Keitel, who will be replaced by George Davis, currently CFO of Applied Materials, in March.
San Diego-based Qualcomm is benefiting from strong demand for smartphones and a move by network operators around the world to a high-speed wireless technology known as Long Term Evolution (LTE), where Qualcomm is ahead of rivals.
"That trend is continuing to work in Qualcomm's favor. They're the only viable option for LTE right now," said MKM Partners analyst Daniel Berenbaum. "It's a very strong quarter and the guidance is very strong."
As well as supplying chips for cellphones and tablet computers, Qualcomm also receives royalty payments from any cellphone makers that do not use its chips.
"It looks like in the quarter, a little bit of the upside came from chipsets," said Berenbaum. "In the guidance, chipsets came in around expectations. It looks like royalties are the upside to guidance."
Qualcomm raised its full-year revenue guidance to a range of $23.4 billion to $24.4 billion from its previous target of $23 billion to $24 billion.
It raised its earnings per share target to a range of $4.25 to $4.45 from its previous forecast range of $4.12 to $4.32.
Qualcomm posted a profit of $1.91 billion or $1.09 per share for the quarter ended Dec. 30, compared with a profit of $1.4 billion or 81 cents per share in the year-ago quarter.
Excluding unusual items, the San Diego-based company reported earnings per share of $1.26 compared with Wall Street expectations of $1.13.
Revenue rose to $6.02 billion from $4.68 billion in the year-ago quarter and compared with Wall Street expectations for $5.9 billion.
Qualcomm shares rose to $67.40 in late trade after closing at