Updated from 8:42 a.m. EDT

Qualcomm ( QCOM) swung to a loss on a hefty Broadcom settlement but raised sales guidance for the year.

The San Diego-based wireless chipmaker posted an adjusted loss of $46 million, or 3 cents a share, due to a 131% tax hit related a settlement Broadcom ( BRCM) and Qualcomm reached Sunday. That loss compares to a 31-cent profit in the prior quarter and a pro forma profit of 54 cents in the year-ago period.

Sales for the fiscal second quarter ended March 29 were $2.46 billion, down from $2.52 in the prior quarter and below the $2.61 billion revenue level a year ago. But the top line beat analysts' estimates calling for $2.35 billion in revenue in the most recent quarter.

Qualcomm felt the pinch of a slowing mobile phone market, but managed to keep more of the top line proceeds. Operating cash flow in the quarter was $1.26 billion, up one-third over year-ago levels.

"While the business environment remains uncertain and the continued distress in global financial markets resulted in additional impairments to our marketable securities, we believe the CDMA inventory channel has stabilized," CEO Paul Jacobs said in a press release.

Looking ahead Qualcomm expects fiscal third-quarter sales to be in a range between $2.4 billion and $2.6 billion. The midpoint of $2.5 billion is above the $2.35 billion analysts were expecting. Operating income, however, will slip to about $850 million, says Qualcomm.

For the full year ending in September, Qualcomm says sales will be between $9.8 billion and $10.2 billion. That is above the $9.69 billion analysts were expecting.

On Sunday, Qualcomm settled a long-running patent dispute with rival Broadcom for $891 million. Qualcomm says it will pay $200 million this quarter as the first of four installments. The settlement also clears all the other claims by Broadcom on Qualcomm, helping to lift the legal distractions that have been dogging the company.

Investors cheered the settlement and the solid sales outlook. Qualcomm shares were rising 6.4% to $44 in recent trading.