Qualcomm raised its outlook for shipments of cell-phone chips Monday, citing growth in emerging markets.
The creator of code division multiple access, or CDMA, technology said it plans to ship 28 million phone chips in the second quarter ending March 30, compared with 14 million chips shipped in the year-ago period. The company previously had expected to ship 27 million chips.
Despite a slump in wireless subscriber growth in recent quarters, the company consistently has raised its shipment guidance, attributing growth to emerging markets including China and India, where it is gaining market share.
In the third quarter ending June 29, the company expects to ship 23 million to 25 million phone chips, up from 16 million chips shipped in the comparable period last year. The company previously hadn't given a specific target range for the third quarter.
Nonetheless, investors apparently were hoping that the company would raise guidance even higher, as Qualcomm shares slipped 27 cents, or 0.8%, to $34.90 in morning trading.
About 90% of the chips shipped in the second quarter and 95% of the chips shipped in the third quarter will be next-generation chips that run on recently launched high-speed wireless data networks at carriers including
"Given more modest upside in March relative to past quarters' upside preannouncements, we had previously not anticipated management to choose to revise expectations upward ahead of results," said Lehman Brothers analyst Tim Luke in a note to clients. "However, we believe comments this morning are broadly in line to slightly better than our estimates, and are likely to be viewed favorably by investors, given some further visibility around June in particular."
At the end of the first quarter, the company said it expected to earn 34 cents a share to 35 cents a share in the current quarter. Wall Street analysts estimate the firm will earn 35 cents a share on sales of $990.13 million. The company will report second-quarter earnings on April 23.