SAN FRANCISCO ( TheStreet) – Qualcomm ( QCOM) fell sharply Thursday, after the San Diego-based semiconductor company missed fourth quarter estimates. Orbitz Worldwide ( OWW) also dropped, while Planar Systems ( PLNR) soared following the companies' earnings reports.
Qualcomm, which reported after the markets closed Wednesday, posted earnings of $1.26 a share in the fourth quarter -- 4% less than what Wall Street had anticipated. The company's revenue reached $6.69 billion in the quarter, a miss from the $7.04 billion analysts expected. Shares tanked 8.6% to close at $70.57.
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Qualcomm took a hit after it reported fourth quarter earnings and revenue that fell short of analysts' expectations, and noted that European and U.S. antitrust investigators are now looking into its business. The chip giant also acknowledged it still faces legal antitrust entanglements in China, which could possibly hurt its business opportunities in that country.
Bank of America Merrill Lynch analyst Tal Liani had this to say in his research report:
"This week we met with carriers, equipment vendors and regulators in Beijing, discussing the Chinese 4G market, demand for smartphones, and the sensitive issue of royalty disputes with Qualcomm. In short, the Chinese cellular market is booming, licenses are awarded, carriers are committed to 4G deployments, and 2014/2015 are expected to be the golden years for base station deployments and customer migration. However, we note that China's regulator and the local vendors are also reluctant to pay Qualcomm its standard royalty fee and see it as an inhibitor to growth. All participants commented on the anti-monopoly investigation, leading us to believe that royalty discounts are not a question of if, but only a question of when and how much. We reiterate our Neutral rating."