Tuesday, January 25, 2011

Qualcomm Sees Record Revenue Driven by Smartphones

Driven by surging smartphone sales and 3G-enabled devices, Qualcomm reported record quarterly sales of $3.35 billion, up 25 percent year-over-year and 13 percent sequentially. Operating income: $1.11 billion, up 26 percent y-o-y and 33 percent sequentially. Net income was $1.17 billion, up 39 percent y-o-y and 35 percent sequentially. It was the best quarter in the company's history.

Qualcomm substantially raised its financial outlook for revenue and earnings for the remainder of 2011.

"We are very pleased to report record revenues, earnings per share and MSM chipset shipments this quarter driven by increased demand for smartphones and data-centric devices across an expanding number of regions and price points," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "In addition, we have resolved one of our previously disclosed licensee disputes (not Panasonic), which will be reflected beginning with the second fiscal quarter results. We continue to execute on our strategic objectives as our partners leverage our technologies and solutions to offer leading wireless products and services to consumers around the globe. We believe we are uniquely positioned to benefit from these industry trends and are substantially raising our revenue and earnings guidance for the fiscal year."

Some key business metrics:

CDMA-based Mobile Station Modem (MSM) shipments: approximately 118 million units, up 28 percent y-o-y and 6 percent sequentially.

September quarter total reported device sales: approximately $34.0 billion, up 39 percent y-o-y and 20 percent sequentially.

September quarter estimated CDMA-based device shipments: approximately 165 to 169 million units at an estimated average selling price of approximately $201 to $207 per unit.

LTE design activity is accelerating with over 25 manufacturers choosing Qualcomm.

More than 150 SnapDragon devices are under development, including more than 20 tablets.http://www.qualcomm.com

  • Earlier this month, Qualcomm confirmed plans to acquire Atheros Communications for $45 per share in cash, which values the deal at $3.1 billion. Atheros, which is based in San Jose, California, is a leading supplier of Wi-Fi silicon. Its product line includes wireless LAN client chips, network processors, Ethernet transceivers, Ethernet switching silicon, Powerline SoCs, and Bluetooth devices. The company has approximately 1,700 employess and reported Q3 2010 revenue of $247 million, up 4 percent compared to $238.2 million reported in the second quarter of 2010.

  • In December 2010, AT&T agreed to acquire Qualcomm's lower 700 MHz D and E Block (Channel 55 and 56) unpaired U.S. spectrum licenses for $1.925 billion. The sale follows Qualcomm's previously announced plan to restructure its FLO TV business. Qualcomm will now shut down its FLO TV business and network in March 2011. The spectrum covers more than 300 million people total nationwide: 12 MHz of Lower 700 MHz D and E block spectrum covers more than 70 million people in five of the top 15 U.S. metropolitan areas — New York, Boston, Philadelphia, Los Angeles and San Francisco; 6 MHz of Lower 700 MHz D block spectrum covers more than 230 million people across the rest of the U.S.