Qualcomm Looks Set For Strong Growth

Such is the importance of its royalty business that Qualcomm has reorganized itself to better protect its patents. The restructuring, which also aims to speed up product delivery, was completed on Oct. 1.

Under the new structure, parent company Qualcomm Inc. includes QTL, as well as the chipmaker's corporate functions and most of the firm's patent portfolio.

A new, wholly owned subsidiary, Qualcomm Technologies Inc. (QTI), along with its subsidiaries, now operates most of the company's R&D and its product and services businesses. The chip specialist's semiconductor business, Qualcomm CDMA Technologies, known as QCT, is operated by QTI.

At least one analyst, however, warns that investors could see some post-earnings volatility from Qualcomm.

"We note Apple suppliers such as Skyworks Solutions (SWKS) and Cirrus Logic (CRUS) have been down 10% to 15% post-earnings despite in-line/upside guidance," wrote Sterne Agee analyst Vijay Rakesh, in a recent note. "But near-term aside, Qualcomm is still the sole 4G optimized chip supplier with the iPhone ramping into China and global 4G-rollouts."

Rakesh has a buy rating and $71 price target on Qualcomm.

Analysts surveyed by Thomson Reuters expect Qualcomm to report fiscal fourth-quarter revenue of $4.67 billion and earnings of 82 cents a share, up from $4.12 billion and 80 cents a share respectively in the prior year's quarter.

For Qualcomm's fiscal first quarter, analysts expect sales of $5.3 billion and earnings of $1 a share.

Shares of Qualcomm, which competes with Broadcom (BRCM) and Texas Instruments (TXN), dipped 3.16% to $58.48 on Wednesday.

--Written by James Rogers in New York.

Follow @jamesjrogers

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