Qualcomm Inc raised its current-quarter profit and revenue targets on stronger sales of mobile phone chips, but its warning that shipments would fall next quarter dampened investor enthusiasm.

Qualcomm shares fell less than 1 percent after the company forecast a modest sequential decrease in chipset shipments due to the weak economy, dashing hopes for a recovery in consumer demand for cellphones.

Normally (chip shipments are) up sequentially in the September quarter, said Pacific Crest analyst James Faucette. Even though they're raising guidance, which is great, we're not sure it shows that end demand is getting better.

Qualcomm said it now expected revenue of $2.67 billion to $2.77 billion for the third quarter ending on June 28, up from a previous forecast of $2.4 billion to $2.6 billion. Wall Street on average was expecting $2.54 billion, according to Reuters Estimates.

The company raised its forecast for operating income, excluding its investment arm and other special items, to a range of $1.06 billion to $1.11 billion, from a previous target of $800 million to $900 million.

It forecast shipments of chips based on its CDMA wireless technology at 94 million to 95 million for the current quarter, ahead of its earlier expectation for 87 million to 92 million.

Our increased guidance reflects stronger-than-expected demand for more data-capable chipsets and increased licensing revenues driven in part by advanced 3G network upgrades, Chief Executive Paul Jacobs said in a statement.

While some chipset demand for developing markets has shifted to the fourth fiscal quarter and demand remains generally strong, due to the current economic environment we remain cautious and currently project a modest sequential decrease in chipset shipments, he said.

Piper Jaffray analyst Michael Walkley said that while investors were focused on the September quarter, he was very pleased with Qualcomm's current-quarter outlook.

It's not often a company beats its profit guidance by 25 percent, Walkley said.

Qualcomm did not give an earnings-per-share forecast due to market volatility and said its outlook did not include provisions for the consequences of any pending legal matters.

Earlier this week, rival Texas Instruments Inc raised its quarterly forecast. While TI said wireless was a factor in its improving results, it said that analog chip sales were a bigger contributor.

Qualcomm shares, which have already risen 40 percent on hopes of a market recovery since March 9, were down 17 cents, or 0.4 percent, at $45.90 in morning Nasdaq trading.

(Reporting by Sinead Carew; editing by John Wallace and Lisa Von Ahn)