Qualcomm Meets Forecasts, but Shares Plunge on 3rd-Quarter Profit Warning

Qualcomm Inc. posted second-quarter earnings that met expectations, but warned that profit in the third quarter would fall well below forecasts. In after-hours trading, Qualcomm shares dropped as much as $10.98 to $52, then rebounded to $54.62. They had closed up $3.48 at $62.98 on Nasdaq.

The San Diego-based company, whose patented CDMA technology is fast becoming a standard in the wireless industry, said after the markets closed that operating earnings rose 12% to $232.64 million, or 29 cents a share, for its fiscal second quarter. Revenue rose 10% to $713 million, due to higher integrated circuits shipments in unit terms and higher royalty and licensing fees.

Qualcomm also said it expects third-quarter earnings of about 21 cents a share, contrasted with analysts’ consensus forecast of 33 cents a share, because of soft demand for chips due to a weaker global economy and lower royalties and licensing fees. The company also expects to post a loss of 2 cents per share related to its business with troubled satellite telephone company Globalstar.