Updated from 5:14 PM

Get the first-aid kit, another third-generation wireless player needs patching up this week as Qualcomm ( QCOM) swooned in its second-quarter earnings report and lowered its forecasts for coming quarters. Qualcomm met analysts' earning estimates for its second quarter ended March 31, turning in 29 cents a share, falling short of revenue expectations with $713 million in revenue. The Street expected 29 cents a share in profit and $721.95 million in revenue, according to Multex.com.

Qualcomm also lowered its sights for third-quarter earnings to 21 cents a share, a dramatic step down from current Multex.com analyst estimates of 32 cents. That drops full fiscal year expectations to $1.05 in earnings, 20 cents off Multex.com's $1.25 earnings figure. CEO Irwin Jacobs trimmed the company's hopes for calendar year 2001 handset sales that use Qualcomm's CDMA technology, one of several competing wireless standards, from 90 million to 80 million. Jacobs blamed "slowing sales and replacement rates related to economic conditions," for the pullback

Qualcomm's revenue grew only 4% sequentially and 10% over the year-ago quarter. The holder of key wireless technology patents reported that it delivered the anticipated 16 million chipsets this quarter, but would not achieve its recently reaffirmed guidance of 16 million chipset sales in the third quarter. Qualcomm trimmed that number down to 14 million.

Management explained that orders were being cut across the board and that it wasn't attributable to one or two big customers. Qualcomm singled out the United States and Korea as trouble spots. "There weren't any order cancellations of any significance," explained CFO Tony Thornley. "Our customers give us regular forecasts that look out two quarters. Within the last week to week and a half, input from them began to add up to less than we thought before. " Qualcomm has 90% of its third-quarter orders secured, so Thornley stood by the 14 million estimate.

Third-quarter revenue also will suffer from ebbing royalty and investment income. Qualcomm booked $91 million from investment interest in the second quarter.

Those aren't the important issues, Wit SoundView analyst Matt Hoffman said. "I'm a little concerned because they didn't confess to all the market weakness we believe is out there," says Hoffman, whose company has not done banking for Qualcomm. "They are blaming it on a reduction in investment income and royalties, but we believe the end markets for CDMA are weak right now." Hoffman said he expects weak demand throughout the summer.

By 2002 Qualcomm expects a better economic outlook and increasing sales in its CMDA 1X bridge technology between older second-generation wireless and new third-generation networks to fuel a quick rebound. Nonetheless, along with wireless service leader NTT DoCoMo ( NTT) -- which delayed its third-generation service rollout from May to October this week -- 2001 is leaving wireless players in bandages.

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