Qualcomm Inc. on Wednesday said strong chipset shipment and new licensing agreements helped to push the latest quarter's results above expectations.
Shares, which have risen 34% so far this year, edged 1% higher after hours to $67.75. The results come a week after the semiconductor company agreed to buy the world's largest developer of chips for automobiles for $39 billion.
Qualcomm, which makes processors and modem chips for smartphones, saw mobile chip shipments rise 4% during the most recent quarter to 211 million, topping the 203 million it had forecast.
Its deal for NXP Semiconductors NV, expected to close by the end of next year, represents a huge bet on cars becoming the next smartphone?a way to roll together communications and services once handled by dozens of other devices.
"We delivered strong results this quarter, with EPS well ahead of our guidance," Chief Executive Steve Mollenkopf said. He added that the strong report was "based on meaningful progress with licensees in China" and that the chipset business is also benefiting from a strong new product ramp across tiers, particularly with fast growing OEMs in China.
"We are forecasting continued growth of global 3G/4G device shipments in calendar year 2017, led by growing demand in emerging regions," he said.
For the current quarter, Qualcomm sees mobile chip shipments between 205 million and 225 million. The company anticipates sales of $5.7 billion to $6.5 billion and per-share earnings between $1.12 and $1.22, in line with analyst forecasts for $6.15 billion in revenue and $1.22 in per-share earnings.
For the September quarter, Qualcomm reported a profit of $1.6 billion, or $1.07 a share, up from $1.06 billion, or 67 cents a share, a year earlier. Adjusted per-share earnings rose to $1.28 from 91 cents, above the range of $1.05 to $1.15 that the company had forecast.
Revenue shot up 13% to $6.18 billion. The company had forecast $5.4 billion to $6.2 billion. Equipment and services revenue rose 15%, and licensing revenue climbed 10% during the quarter.
Qualcomm has two significant businesses?one that provides chips and another that licenses patents on cellular technology to smartphone makers. The company is the biggest manufacturer of processors and modem chips used in mobile phones.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
November 02, 2016 17:15 ET (21:15 GMT)
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