On Wednesday after the bell Qualcomm said its fiscal first-quarter profit more than doubled as demand for chips for cell phones rebounded.

Qualcomm, based in San Diego, on Wednesday posted net income of $841 million, or 50 cents per share, in the quarter that ended Dec. 27. That was up from $341 million, or 20 cents per share, in the same period the year before.

Revenue rose 6 percent to $2.67 billion.

But the company’s outlook remained cautious disappointing investors and shares dropped 8% in extended trade.

The chip maker cited the difficult economy, as well as higher sales of lower end phones as two strong headwinds that would result in lower profitability going forward.

What’s the trade?

It turns out that Qualcomm is not the provider of chips for the new iPad, as previously believed, says Pete Najarian. That could be dragging down the stock. However if the stock can get below $40 I find it attractive.

I think Qualcomm’s outlook bodes poorly for the handset makers, muses Tim Seymour.

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Trader disclosure: On January 27th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU), (GS); Najarian Owns (AAPL) Call Spread; Najarian Owns (CTXS) Calls; Najarian Owns (GS) Call Spread; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (XLF) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (UNG), (USO); Finerman Owns (AAPL); Finerman's Firm Owns (BAC) Leap, (BAC); Finerman Owns (BAC) Prefered, (BAC); Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (KFT), (MSFT); Finerman's Firm And Finerman Own (WFC) Preferred; Seymour Owns (AAPL), (BAC), (INTC)

For Tim Seymour:
Seygem Asset Management Owns (FCX)
Seygem Asset Management Owns (TSO)
Seygem Asset Management Is Short (VALE)
Seygem Asset Management Owns (X)
Seygem Asset Management Owns (PBR)

For Pip Coburn
Pip Coburn Invests In Buckeye Delta Fund
Buckeye Delta Fund Owns (AAPL), (ADBE), (ANSS), (RIMM), Arm Holdings plc, (GOOG)
Buckeye Delta Fund Is Short (NOK), (PALM), (MOT)

For Paul Miller
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (FITB)

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