This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Qualcomm's Pain May Be Apple's Gain

NEW YORK ( TheStreet) - Qualcomm (QCOM - Get Report) disclosed one of those good problems during its conference call Wednesday night.

The San Diego-based wireless chip maker said its product supply can't meet up with demand, and that very well could largely be a function of Apple's (AAPL - Get Report) big needs.

After reporting its second-quarter earnings, Qualcomm said it's seeing supply constraints for its 28 nanometer (NM) chips. It's working on getting supply up to speed, and that will cause operating expenses to be slightly higher in the third quarter.

The company, which supplies semiconductors to handset makers including Apple and Samsung, posted earnings, excluding items, of $1.01 a share on $4.94 billion in revenue. Analysts polled by Thomson Reuters had expected earnings of 96 cents a share on $4.84 billion in revenue.

Apple is transitioning towards the 28 nm chip, said Citigroup analyst Glen Yeung in commentary issued Thursday after the second-quarter report, and this is the reason for the supply shortage of 28 nm, rather than 45 nm.

"We attribute this predominantly to Apple who is reducing demand for 45nm baseband (MDM6610 in iPhone4S) in favor of 28nm baseband (MDM9615 in iPhone5)," Yeung said in his note. He expects a September/October launch of the iPhone 5. Yeun reiterated a buy rating on Qualcomm shares and raised his price target to $74 from $73.

Qualcomm CEO Dr. Paul Jacobs said he is excited to see the continued growth in 3G and 4G/LTE handsets, as well as new mobile computing devices.

Qualcomm has been a major beneficiary in the adoption of 4G, said BMO analyst Kevin Manning. The analyst said he expects the average selling price (ASP) "to improve for both devices and chipsets as 4G grows and Qualcomm gains more content." He has an outperform rating on the stock with a $77 price target. Qualcomm raised its own assumption on ASP from $210 per unit to $212 for 2012.

Both AT&T (T - Get Report) and Verizon (VZ - Get Report) continue to build out their 4G networks in the United States.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $109.27 0.00%
QCOM $54.29 0.00%
T $32.56 0.00%
VZ $44.82 0.00%
FB $88.26 0.00%

Markets

Chart of I:DJI
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASDAQ 4,683.9190 -49.5780 -1.05%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs