Qualcomm’s profit soars on chip sales

Qualcomm Inc. reported Thursday that its fiscal fourth-quarter earnings nearly doubled on demand for chips that power high-end cellphones, but its estimate of first-quarter profit was on the low end of Wall Street’s expectations.

Shares of San Diego-based Qualcomm tumbled 3.5%, or $1.43, to $39.76, then plunged an additional $2.86 after hours.

Qualcomm, the world’s second-largest supplier of cellphone chips, earned $1.13 billion, or 67 cents a share, during the three-month period that ended Sept. 30, up from $614 million, or 36 cents, a year earlier.

The fourth-quarter earnings include per-share charges of 2 cents from investments and 5 cents for stock-based compensation and a gain of 20 cents a share on tax items carried over from previous years.

Excluding those items, Qualcomm earned 54 cents a share. Analysts polled by Thomson Financial expected 53 cents.

Revenue grew 15% to $2.31 billion, above analyst expectations of $2.26 billion.

Qualcomm said it expected a first-quarter profit of 50 cents to 52 cents a share, excluding certain items. Analysts polled by Thomson Financial expected 52 cents.

The company projected first-quarter revenue of $2.3 billion to $2.4 billion, compared with an average analyst estimate of $2.38 billion.

Qualcomm licenses its code division multiple access, or CDMA, technology, which is popular in the United States and Asia. Wireless carriers that use the technology include Verizon Wireless and Sprint Nextel Corp.

The company is waging fierce legal and trade battles over how much money it should be paid for licensing its technology. Wireless industry heavyweights, including Nokia, the world’s largest handset maker, say Qualcomm’s fees are too high and stifle competition.