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Company Profile: San Diego, Calif.-based Qualcomm designs manufacture and markets digital wireless telecommunications products and services based on its CDMA technology and other technologies.
Qualcomm raised its dividend by 13.2% to 21.5 cents per share
, up from its prior payout of 19 cents per share.
The higher dividend will be paid on June 24 to shareholders of record on May 27. That will bring Qualcomm's yield to around 1.6%.
FBR Capital analysts maintained an outperform rating on the stock following the dividend hike, noting that "for QCOM, recent investor concerns about smartphone production cuts at
LG(LPL), concerns about a non-
Apple(AAPL) tablet glut, and profit taking weighed on QCOM and drove shares down towards $50. With that wave having passed, the stock seems to be heading higher in the near term."
"Qualcomm's potential baseband socket win in the iPhone 5 would be an upside driver," the analyst added. "Net, smartphone demand should heat up again in
the second half of 2011
, with possible share price upside towards $80 over time as we expect chipset and licensing shipments to continue to grow."
After the closing bell on April 20, Qualcomm posted better-than-expected adjusted second-quarter earnings of 86 cents per share, topping expectations for a profit of 80 cents per share. Revenue also came in above expectations at $3.88 billion. Qualcomm raised its full-year financial outlook, attributed to the increasing popularity of smartphones and tablet computers.
"It quells any fears of cellphone weakness similar to Intel's quieting of concerns about PC weakness," noted Williams Financial analyst Cody Acree, referring to a strong forecast from chipmaker
Intel(INTC) the day before.
FBR Capital Markets analyst Craig Berger noted that Qualcomm shares have been under pressure recently, which he attributed to investor worries about order strength from some of its large customers like
Samsung. Still, he said business from
Apple(AAPL) will drive Qualcomm's results.
On April 27 Qualcomm announced the commercial availability of its Augmented Reality (AR) platform for Android smartphones.
The AR platform provides users with a new form of interactive media, enabling high-performance, interactive 3D experiences on real world images, such as those used in print media (books, magazines, brochures, tickets, signs) and on product packaging.
ThinkEquity analysts initiated coverage of Qualcomm with a buy rating and $75 price target.
The company already has nearly 30 buy or better analyst recommendations. It has four hold ratings and no sell ratings.
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