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Thursday, Jun 8, 2023

With an $11B Year in the Books, Qualcomm Lowers its 2009 Forecast

The world’s largest chipmaker for mobile devices missed its earnings target on the quarter and lowered guidance for 2009, saying the credit crises and economic uncertainty would affect device sales more than previously thought.

Qualcomm reported quarterly earnings of $878 million on revenues of $3.33 billion in the period ending Sept. 28. Diluted per share earnings was 52 cents, down 22 percent from a year ago.

Analysts polled by Thomson Reuters expected 60 cents a share.

On the year, Qualcomm said net income fell 4 percent to $3.16 billion on revenues of $11.13 billion. Diluted earnings per share were $1.90, down 3 percent on the year.

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Qualcomm earned higher revenues on new licensing and settlement agreements with Nokia that resulted from litigation between the companies.

The company attributed much of its losses to depressed investment holdings, which would likely deepen when the October market crash is reflected in its first quarter earnings.

Chief Executive Paul Jacobs signaled that the year 2009 would be a long one for chipmakers and mobile phone sales.

Qualcomm forecast first-quarter pro forma earnings per share of 46 cents to 50 cents, on revenue of $2.3 billion to $2.5 billion. Analysts on average had expected first-quarter earnings of 61 cents a share on revenue of $2.9 billion.

“Our guidance reflects slower end-market device growth for 2009 than previously anticipated and a significant contraction in channel inventory in the first and second fiscal quarters. While we are estimating strong growth for CDMA-based devices in calendar year 2009, driven by a shift to emerging markets, this growth is meaningfully less than we would have forecast just a few weeks ago,” Jacobs said.

He said the company’s investments in mobile TV, mobile commerce and next-generation technologies will bolster its product and patent portfolio.

“We are well positioned to navigate through these uncertain times and will continue to focus on our long- term strategic objectives.”

Qualcomm shares fell 6 percent on the day , in what was a broad sell-off among all indices , closing at $33.05 per share.


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