Updated from July 21 The wireless industry's hot streak continued Wednesday with a strong quarter out of Qualcomm ( QCOM). For its third quarter ended June 30, Qualcomm reported a profit of $486 million, or 58 cents a share. That's up from the year-ago continuing operations profit of $241 million, or 30 cents a share. Revenue rose to $1.34 billion from $891 million a year earlier. Analysts had expected third-quarter earnings of 53 cents a share on sales of $1.3 billion. The company also raised 2004 earnings and revenue guidance, citing stronger-than-expected demand for its wideband-CDMA wireless chipsets and software. In early trading Thursday, Qualcomm rose 2%. The San Diego-based digital wireless company boasts a firm claim on technology patents, and therefore a dominant position in the code division multiple access, or CDMA, market. The company collects royalties on all CDMA phone sales and additional fees from licensing of patents. "The CDMA market continues to exhibit impressive growth as more subscribers are enjoying the benefits of third generation CDMA networks throughout the world," said CEO Irwin Jacobs. "Record demand for our chipsets and stronger than expected WCDMA sales are driving higher revenues and earnings." Qualcomm rose $1.28 Thursday to $68.96. The stock has retreated modestly since last week's stock split and dividend boost, which came just two weeks after the stock hit a 52-week high of $73.50. Qualcomm forecast earnings of $2.12-$2.15 for 2004, up from $1.01 last year. The company expects revenue to rise 34%. Qualcomm also sees 2004 industrywide CDMA market handset sales of around 165 million units, with average selling prices rising some 8% to $209. For the year, Wall Street analysts expect earnings of $2.06 a share on revenue of almost $5 billion. The CDMA standard is the fastest-growing one in the market today, favored as it is by big players such as Verizon Wireless and Sprint ( FON). The growth in the CDMA market has enabled Qualcomm to raise financial guidance and boost its dividend repeatedly in the last year.
Even though AT&T tried a last-minute bribe of promising 5,000 new U.S. jobs to help gain support for the deal, the Justice Department filed a complaint to fight the combination of the nation's No. 2 and No. 4 wireless carriers.