NEW YORK (TheStreet) -- Shares of QUALCOMM Inc. (QCOM) closed down -6.65% to $76.17 on very heavy trading volume after the chipmaker said said it's struggling to collect license revenue from handset makers in China, the world's largest mobile-phone market, threatening profit growth, according to Bloomberg.
Yesterday, the company gave a quarterly earnings forecast that was below analysts' average estimate.
QUALCOMM said missed royalty payments for chips running on the new long-term evolution standard as manufacturers fail to report phone sales or refuse to sign contracts. Licensing is Qualcomm's most profitable business, Bloomberg noted.
TheStreet Ratings team rates QUALCOMM INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate QUALCOMM INC (QCOM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows: