Chipmaker Qualcomm Inc forecast double-digit sales growth this fiscal year, banking on continued strong demand for smartphones and mobile devices as its quarterly results beat Wall Street estimates.
San Diego based Qualcomm makes chips for a number of mobile devices, including Apple Inc's newest iPhone, which has seen record sales since its launch last month and helped to boost Qualcomm's earnings in the past quarter.
Chief executive Paul Jacobs said on Wednesday he anticipated demand for smartphones and tablets to remain strong and said the company would also benefit from further expansion of data network technology in emerging countries.
The mobile chip maker estimated full-year revenue of $18 billion to $19 billion, an increase of 20 to 27 percent from a year ago, and 7 percent to 13 percent growth in earnings per share.
For the current quarter and holiday shopping season, it expects sales to jump 30 percent to 42 percent.
By comparison, rivals Broadcom Corp and Texas Instruments Inc both warned last month that revenue could slip on weaker demand this quarter.
However, while Broadcom also makes chips for Apple products and other cellphone makers, it has a larger exposure to the declining PC market as does Texas Instruments.
Analysts welcomed Qualcomm's outlook saying there was little not to like.
They really don't have any PC exposure and they have been picking up some market share, plus they are benefiting from a pickup in Apple and Nokia, said Aalok Shah D.A. Davidson & Co.
Sanford C. Bernstein & Co's Stacy Rasgon said Qualcomm was baking in some economic uncertainty ... but to have them guide this way is good.
Qualcomm said on a conference call with analysts that consumers would likely hang on to their phones longer before replacing them in countries where GDP growth was lower and that the company had factored in that the global economy was a little weaker.
Qualcomm, which also makes money off licensing royalties for its chip patents, posted fourth quarter net earnings of $1.06 billion, or 0.62 cents per share, compared with $865 million, or 53 cents per share, in the year-ago quarter.
Revenue in its fourth quarter, which ended September 30, rose 39 percent to $4.12 billion, compared with Wall Street expectations for almost $4 billion according to Thomson Reuters I/B/E/S.
Qualcomm shares rose 9 percent in late trading after closing at $52.18 in the regular Nasdaq session.
(Reporting by Nicola Leske; editing by Richard Chang and Andre Grenon)