Qualcomm on Wednesday raised the revenue and profit forecasts for its 2009 fiscal year ending in September, signaling confidence in a mobile industry recovery.
The wireless technology vendor expects revenue between US$10.25 billion and $10.45 billion for the year, up from an earlier prediction of $9.85 billion to $10.25 billion. That still would represent a decline of between 6 percent and 8 percent from the 2008 fiscal year, but the drop could be less steep than predicted earlier.
Qualcomm expects to have annual operating income of $2.34 billion to $2.44 billion. It had previously forecast operating income between $1.95 billion and $2.15 billion.
The global recession hit the cell-phone business hard, as it hit in the latter part of last year and consumers tightened their belts. But users worldwide are migrating to 3G (third-generation) mobile technology, according to Qualcomm, and the company collects revenue on both the CDMA (Code-Division Multiple Access) and Wideband CDMA variants of that technology. Qualcomm said its third quarter, ended June 28, set a record for licensing revenue, royalties and sales of its MSM (Mobile Station Modem) chipsets.
"We anticipate another strong quarter for our chipset shipments in the fourth fiscal quarter," Chairman and CEO Paul Jacobs said in a prepared statement.
Qualcomm made the new forecast as it reported its third-quarter results. The company reported revenue of $2.75 billion, down slightly from $2.76 billion a year earlier. Its net income was $737 million, or $0.44 per share, down from $748 million, or $0.45 per share, a year earlier.
The company did hint at some storm clouds on the horizon. It expects the Korea Fair Trade Commission (KFTC) to issue a decision shortly in a case in which the South Korean regulator charged that some of Qualcomm's business practices were anticompetitive. The case involves rebates and discounts as well as integration of certain functions on chips. The KFTC may order the company to change some of those practices, Qualcomm said in its financial press release. The company is also anticipating that the KFTC will impose a fine and expects that it will be "substantial." Qualcomm said it believes its practices are sound and will seek a stay in the case and pursue all avenues of appeal.