Qualcomm posts 22 percent decline in 4Q profit
SAN DIEGO -- Qualcomm Inc. posted a 22 percent decline in fiscal fourth-quarter profit Thursday even as a license agreement with rival wireless equipment maker Nokia Corp. helped boost revenue 45 percent.
The company's revenue and profit estimates for 2009 fell far below analyst expectations.
Qualcomm earned $878 million, or 52 cents a share, in the three-month period ended Sept. 28, down from $1.13 billion, or 67 cents a share, the same period last year. Losses on financial investments accounted for much of the decline, and last year's result included a large tax benefit.
Excluding a charge of 6 cents a share for stock-based compensation and a per-share loss of 5 cents in its strategic investment unit, Qualcomm earned 63 cents a share in the latest period, 3 cents higher than the estimate among analysts polled by Thomson Reuters.
Revenue soared to $3.33 billion from $2.31 billion. The latest figure included $560 million booked from the settlement with Nokia, the world's largest handset maker.
The wireless industry heavyweights agreed to a 15-year licensing deal in July and ended a wide-ranging legal dispute. Qualcomm said it received an upfront payment of $2.5 billion in October as part of the deal.
San Diego-based Qualcomm warned of a sharp slowdown in business, highlighted by lighter demand for its chips that power many of the world's mobile phones. Qualcomm makes money by selling chips and by collecting licensing fees on its patented technology from wireless equipment makers.
"We think this is going to be a much faster contraction, it's going to be a lot quicker than we've seen in the past," Bill Keitel, chief financial officer, told analysts on a conference call. "We see this happening over the next two quarters."
The results were released after markets closed. Qualcomm shares fell $2.12 or 6 percent to $33.05 amid a broad market decline and shed another 82 cents after hours.
Qualcomm estimated a first-quarter profit between 46 and 50 cents a share, excluding certain items, below the analyst estimate of 61 cents a share. It projected revenue of $2.3 billion to $2.5 billion, compared to the analyst estimate of $2.91 billion
For the 2009 fiscal year, Qualcomm estimated a per-share profit of $2 to $2.10, excluding certain items, below the analyst estimate of $2.58. It projected revenue between $10.2 billion and $10.8 billion, compared to analyst estimate of $12.13 billion.
"We anticipate the challenging global environment will impact our business and industry as well as many other companies around the world," said Chief Executive Officer Paul Jacobs.