CDMA chip giant Qualcomm reported a 35 percent rise in profits for its third fiscal quarter despite struggles at some handset manufacturers that use its technology, such as Research In Motion and Sony Ericsson.
The company made $1.04 billion on a 34 percent increase in sales, which hit $3.62 billion, for the quarter ended June 26. Qualcomm estimated that between 170 million and 174 million CDMA devices were shipped by companies licensing its patents, with an average selling price ranging from $209 to $215 per unit.
“While we’ve continued to execute on our strategic priorities, we’ve seen our opportunities expand at an even greater rate than we have previously expected,” Qualcomm CEO Paul Jacobs said in a conference call with analysts.
However, despite raising its fourth-quarter sales forecast, the company’s outlook on CDMA shipments was weaker than expected and Qualcomm’s stock edged down more than 2 percent in after-hours trading.
Steve Mollenkopf, who heads Qualcomm’s CDMA business, said the soft outlook was related to a “buffer build” in reaction to the earthquake in Japan.
Company CFO Bill Keitel said growing demand for CDMA and WCDMA devices in China, Southeast Asia, the Middle East and Africa helped offset weakness in Europe and India.
“We’re seeing really good strength in China and then across Southeast Asia, Middle East Africa,” Keitel said. “Although we’re seeing that uplift there, we softened a bit our forecast for WCDMA Europe, I think the economic troubles there are holding back the consumer a bit. And then it’s similar for India.”
Keitel also the company was also seeing a “strong pace” for connected devices, USB modems and eBooks.
During the third quarter, Qualcomm completed its acquisition of Atheros in a move to strengthen its presence in the connected home and smart grid markets. Atheros contributed less than $100 million to Qualcomm’s top line over the five weeks it was part of the company since the deal closed in late May.