NEW YORK - Qualcomm, the world's largest maker of chips that run cell phones, issued fourth-quarter and full-year earnings guidance Thursday that fell short of Wall Street targets, but the stock soared on a broad-ranging legal settlement.
Qualcomm shares rose $7.61, or 17 percent, to $52.43 Thursday, after hitting a 52-week high of $54.51 earlier in the session. After the close of market Wednesday, Qualcomm and Nokia Corp. announced they have ended a long-running licensing dispute and agreed to drop all legal complaints against each other in the United States, Europe and Asia.
Qualcomm said it was still "working through the mechanics" of the settlement, but preliminary estimates suggest a gain of 7 cents to 13 cents per share in the fiscal year ending Sept. 28. Those gains aren't reflected in Thursday's estimates.
Qualcomm said earnings, excluding stock-based compensation and other charges, should be in the range of 49 cents to 51 cents per share in the fiscal fourth quarter, compared with the 54 cents analysts polled by Thomson Financial were expecting.
For the full fiscal year, Qualcomm now estimates earnings at $2.11 to $2.13 per share. The lower end is an increase from its June guidance in the range of $2.09 to $2.13, though analysts were estimating $2.15 per share.
Qualcomm estimates fourth-quarter revenues at $2.5 billion to $2.7 billion. Analysts were expecting just over $2.7 billion.
For the full year, Qualcomm expects revenue at $10.3 billion to $10.5 billion, slightly up from its April guidance in the range of $10 billion to $10.4 billion. Analysts have estimated $10.5 billion.
Qualcomm said it expects a 30 percent year-over-year growth in shipments of CDMA-based devices this calendar year, while global demand for 3G wireless products enjoys rapid increases. CDMA is one of the main radio standards for cellular networks, while "3G" refers to the latest generation, high-speed version of wireless networks.
Qualcomm's 15-year licensing deal with Nokia gives Nokia rights to a wide portfolio of Qualcomm's patents. Nokia will pay Qualcomm an upfront sum and ongoing royalties, but the companies did not elaborate on the terms.
During a conference call, Chief Financial Officer William E. Keitel said the 7- to 13-cent-per-share gain include "catch-up" payments for royalties owed in the past, but largely reflects "very substantial upfront payments."
Citing confidentiality agreements, Qualcomm executives declined to answer most questions seeking details about the deal, though they expressed relief.
Paul E. Jacobs, Qualcomm's chief executive, said concerns about Nokia "have often overshadowed the performance of the company."
Qualcomm shares rose $7.61, or 17 percent, to $52.43 Thursday, after hitting a 52-week high of $54.51 earlier in the session. After the close of market Wednesday, Qualcomm and Nokia Corp. announced they have ended a long-running licensing dispute and agreed to drop all legal complaints against each other in the United States, Europe and Asia.
Qualcomm said it was still "working through the mechanics" of the settlement, but preliminary estimates suggest a gain of 7 cents to 13 cents per share in the fiscal year ending Sept. 28. Those gains aren't reflected in Thursday's estimates.
Qualcomm said earnings, excluding stock-based compensation and other charges, should be in the range of 49 cents to 51 cents per share in the fiscal fourth quarter, compared with the 54 cents analysts polled by Thomson Financial were expecting.
For the full fiscal year, Qualcomm now estimates earnings at $2.11 to $2.13 per share. The lower end is an increase from its June guidance in the range of $2.09 to $2.13, though analysts were estimating $2.15 per share.
Qualcomm estimates fourth-quarter revenues at $2.5 billion to $2.7 billion. Analysts were expecting just over $2.7 billion.
For the full year, Qualcomm expects revenue at $10.3 billion to $10.5 billion, slightly up from its April guidance in the range of $10 billion to $10.4 billion. Analysts have estimated $10.5 billion.
Qualcomm said it expects a 30 percent year-over-year growth in shipments of CDMA-based devices this calendar year, while global demand for 3G wireless products enjoys rapid increases. CDMA is one of the main radio standards for cellular networks, while "3G" refers to the latest generation, high-speed version of wireless networks.
Qualcomm's 15-year licensing deal with Nokia gives Nokia rights to a wide portfolio of Qualcomm's patents. Nokia will pay Qualcomm an upfront sum and ongoing royalties, but the companies did not elaborate on the terms.
During a conference call, Chief Financial Officer William E. Keitel said the 7- to 13-cent-per-share gain include "catch-up" payments for royalties owed in the past, but largely reflects "very substantial upfront payments."
Citing confidentiality agreements, Qualcomm executives declined to answer most questions seeking details about the deal, though they expressed relief.
Paul E. Jacobs, Qualcomm's chief executive, said concerns about Nokia "have often overshadowed the performance of the company."
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