The San Diego wireless tech shop and chip manufacturer is expected to report strong fiscal third-quarter results. Given recent design wins at Apple (AAPL), Nokia (NOK) and Research In Motion (RIMM), Qualcomm should be able to offer a fairly sunny outlook.
"Gains in low-cost WCDMA in Asia, the release of the new iPhone, and changes in strategy at Nokia and RIM will all likely lead to out-performance by Qualcomm for several quarters," Charter Equity Research analyst Ed Snyder wrote in a note last week.
Analysts expect Qualcomm to post adjusted earnings of 71 cents a share on sales of $3.6 billion for the fiscal third quarter ended last month. Looking ahead, analysts expect the company to post a profit of 76 cents on $3.96 billion in sales, a 10% sequential revenue growth rate and 33% year-over-year.Much of Qualcomm's gains come at the expense of other chip suppliers. In the case of Apple, Intel's (INTC) Infineon is the loser as the new iPhone substitutes Qualcomm's so-called world phone wireless baseband chips for Infineon's GSM kit. "Most of" Infineon's chips "will be replaced over the next year with Qualcomm-based phones, starting with iPhone 4S in September, and followed by iPhone 5 in June 2012," Snyder wrote. This should be a good sales boost for Qualcomm if Apple is selling some 20 million iPhones a quarter starting midway through next year, Snyder estimated. While the wins in wireless chips at Apple are huge, the new iPhones will use Apple's own ARM (ARMH)-based processors, not Qualcomm's Snapdragon technology. But Snapdragon is expected to be part of the plan for at least the first generation of Nokia's Microsoft (MSFT) Windows 7 phones, which are due later this year. RIM, too, is expected to have Qualcomm chips inside the upcoming touch-screen BlackBerry Bold. At $56, Qualcomm shares are down from the $59 high in late February, but up 53% for the past year. --Written by Scott Moritz in New York.
To contact this writer, click here: Scott Moritz, or email: firstname.lastname@example.org. Follow Scott on Twitter at MoritzDispatch
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