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Qualcomm's Quarterly Net Income Jumps 53%

November 06, 2003|James S. Granelli | Times Staff Writer

Mobile phone pioneer Qualcomm Inc. on Wednesday reported a 53% jump in its fiscal fourth-quarter profit, boosted by increased licensing contracts and the early success of its advanced wireless technology and chips.

The San Diego company earned $291.4 million, or 35 cents a share, in the three months ended Sept. 28, compared with $190.3 million, or 23 cents, a year earlier. Quarterly sales rose 4% to $908.8 million from $873.9 million a year earlier.

For its fiscal year, Qualcomm earned $827.4 million, or $1.01 a share, more than double last year's profit of $359.7 million, or 44 cents. Sales rose 33% to $4 billion from $3 billion.

Qualcomm Chairman Irwin Mark Jacobs called the performance "exceptional."

The company also offered a rosy picture for sales, at least for the current quarter. It expects revenue to grow 14% to 20% with earnings of 25 cents to 28 cents a share in the first quarter. Projections for the year were 3% to 7% sales growth and earnings of $1.17 to $1.23 a share.

Qualcomm shares fell 73 cents to $46.59 on Nasdaq, but they rose as high as $48.30 in late trading after the earnings announcement.

Qualcomm royalties on the licensing of its code division multiple access, or CDMA, technology accounted for 26% of fourth-quarter revenue but 52% of net income.

CDMA technology and chipsets are the foundation for the Verizon Wireless network and the Sprint Corp. network.

Verizon Wireless, the nation's largest cellular phone company, expects customer demand to swell for CDMA's next generation of super-fast data service, which was rolled out recently in San Diego and Washington. Wireless operators in South Korea also introduced the service, which allows users to access the Internet at high speeds.

Although Qualcomm's technology is strong in the U.S., a rival technology called global system for mobile communications, or GSM, is dominant worldwide.

But CDMA sales are growing in Asia and Europe, Jacobs said. Vodafone Group in Britain, the world's largest mobile phone company and a partner with Verizon Communications in Verizon Wireless, is using CDMA in new phones.

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