Qualcomm reported a 35% increase in earnings to $3.64 Billion due to strong demand for wireless devices. Net income was $1.04 Billion; EPS was 61 cents. Results were constrained by the weakness in Europe which is causing uncertainty in the market. The forecast for CDMA devices was lowered because of decreasing European demand. Despite this, Qualcomm is still a leader in the chip market and has a strong global reach. The financial targets for the next quarter have been raised. Revenue next year is projected to be about half a billion more than previous expectations. The expected range is $14.7 to $15 Billion.
Shares are down over 2% after hours due to the decrease in forecast for cell phone chip shipments. Investors are worried about an economic slowdown which would put a halt to consumer spending. However, I am still bullish for a couple of reasons. The issue with the debt ceiling will be resolved which will send investors rushing back to equities. Specific to Qualcomm, smart phones have been a hot item in emerging markets. In addition, the new iphone, which Qualcomm will make chips for, is expected to make an arrival this fall.