Qualcomm, Seagate Raise Profit Forecasts; TI Narrows Outlook

Qualcomm Inc., the world’s No. 2 maker of chips that run mobile phones, raised its fiscal second-quarter profit forecast Monday because royalty payments increased more than expected. Shares of the San Diego company had their largest gain in seven months.

Meanwhile, Seagate Technology, the world’s largest maker of computer disk drives, forecast fiscal third-quarter profit of 36 cents a share, exceeding analyst estimates. The Scotts Valley, Calif.-based company saw greater demand from consumer electronics and storage systems companies.

But Texas Instruments Inc., Qualcomm’s top competitor, said first-quarter sales and profit would be at the low end of forecasts as demand for chips used in televisions fell and clients worked off inventory.

For Qualcomm, net income will be as much as 27 cents a share in the period ending March 27, compared with a previous forecast of as much as 26 cents, the company said. It added that profit would fall from last year’s 29 cents, the first decline in 11 quarters.

Customers sold a higher-than-expected number of handsets based on Qualcomm’s designs in the first quarter, resulting in higher royalty fees in the current period.

Sales may rise to as much as $1.4 billion in the quarter, missing a previous forecast for as much as $1.45 billion.

Shares of Qualcomm rose $1.89, or 5%, to $37.39 on Nasdaq. That’s the largest one-day gain since July 22, when the company’s third-quarter profit topped its forecast.

Qualcomm will hold its annual shareholder meeting today in San Diego.

Seagate Technology, meanwhile, said sales would rise 35% to $1.87 billion in the period ending April 1. Analysts expected profit of 33 cents a share and sales of $1.86 billion, according to a Thomson First Call survey.

Shares of Seagate rose 17 cents in extended trading Monday to $19 after the forecast. They had fallen 13 cents to $18.83 on the New York Stock Exchange and have gained 9% this year.

The company also raised its quarterly dividend to 8 cents a share from 6 cents.

Texas Instruments late Monday said sales would be $2.91 billion to $3.03 billion, compared with $2.9 billion to $3.14 billion predicted in January. Net income in the period ending March 31 is expected to be 22 cents to 24 cents a share. The company previously forecast 22 cents to 26 cents.

Chip orders for large-screen TVs and projectors are trailing predictions, Dallas-based Texas Instruments said.

Shares of Texas Instruments fell 87 cents to $26.50 in after-hours trading Monday after the report. They had risen 48 cents to $27.37 on the New York Stock Exchange. The shares have fallen 13% in the last 12 months.