Qualcomm Profit, Sales Top Forecasts; Shares Move Higher

Qualcommearnings rose and outstripped what Wall Street expected from the company as demand for smartphones grew, and the company's shares jumped in extended trading Wednesday.

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Pacific Crest analyst James Faucette said Qualcomm was helped by strong sales of phones using Android software from Google Inc as these devices tend to need more complex and expensive chips.

"It was a really good quarter,'' said Faucette. "Demand is picking up a little bit, especially in the smartphone segment. Qualcomm's tied to Android, so as Android phone sales increase it's good for Qualcomm.''

Android phones from companies including Motorola and HTC are the flagship devices sold at top U.S. wireless provider Verizon Wireless, a venture of Verizon Communications and Vodafone Group.

The cellphone chip maker reported a profit of 57 cents a share excluding one-time items in its fiscal third quarter, up from 54 cents a share last year.

Sales for the quarter stood at $2.7 billion, a decline from a year ago of about 2 percent.

The company was seen earning 54 cents a share on sales of $2.63 billion, according to a consensus estimate from Thomson Reuters.

Qualcomm shares rose about 3 percent in after-hours trading on Wednesday. Get after-hour quotes for Qualcomm here.

The stock finished the regular Nasdaq session down 1.6 percent at $36.16.

Faucette said the share rise was likely partly a relief rally as Qualcomm shares have fallen more than 12 percent since April on concerns about weaker growth prospects.

For the current quarter Qualcomm estimated earnings per share, excluding unusual items, of 55 cents to 59 cents on revenue of $2.67 billion to $2.93 billion.

Analysts had expected earnings of 57 cents per share on revenue of $2.767 billion, according to Thomson Reuters.

The latest results include a loss of 7 cents a share from share-based compensation and 3 cents a share from tax items. Including those items, Qualcommm earned $767 million, or 47 cents a share in the three months that ended on June 27.