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Apple, Samsung May Boost Qualcomm Results

 April 18, 2012 10:03 AM

Cell phone chip maker Qualcomm, Inc. (NASDAQ:QCOM) is expected to post strong earnings and revenue growth when it reports its second quarter results on April 18.

Wall Street expects the company to earn 96 cents a share, an increase of 12 percent from the 86 cents it earned in the same period last year. In the past 90 days, consensus earnings estimates have increased from 88 cents a share to 96 cents a share. During the last seven days, two analysts have revised their earnings estimates up on Qualcomm.

The company has topped Wall Street's earnings estimates in the past four quarters.

The Street expects Qualcomm's revenue to grow 25 percent to $4.84 billion, according to analysts polled by Thomson Reuters. In the second quarter of last year, QCOM generated $3.87 billion in sales. Qualcomm also managed to grow revenue in double digits for the past four quarters.

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In the first quarter, Qualcomm earned $1.40 billion or 81 cents per share, compared to $1.17 billion or 71 cents per share last year. Excluding items, Qualcomm earned $1.67 billion or 97 cents per share. San Diego, California-based Qualcomm's revenues grew 40 percent to $4.68 billion.

In addition, 83 percent of Wall Street analysts covering Qualcomm rate the stock as a "buy" or "strong buy"; 14 of them rate "hold," while 1 analyst has a "sell" rating, according to Thomson Reuters data.

Qualcomm's second-quarter is expected to be boosted by orders from Apple and Samsung. Both smartphone companies are relying on the company's 3G and 4G chipsets for their iPhones, iPads, and Galaxy line of devices.

[Related -QUALCOMM, Inc. (QCOM): Did Goldman Lowball With $80 Price-Target?]

"We expect a good March quarter from Qualcomm spurred by Apple and Samsung," Oppenheimer analyst Ittai Kidron wrote in a note to clients.

The heavy adoption of 3G and increasing demand from China should bode well for Qualcomm and drive share gains for the company.

Qualcomm is also poised to gain share in 2012-13 due to its favorable vendor mix as the iPhone 5 and new Galaxy phones launch, along with increased 4G LTE adoption.

"We see the potential for upside as normal chipset ASP declines could be muted by accelerating LTE adoption. Qualcomm's projections suggest a third of its volume exiting 2012 could include LTE. Overall, we expect Qualcomm to continue to see the benefits of 3G/4G adoption, smartphones, share gains and TAM expansion," Kidron said.

Shares of Qualcomm increased 25 percent in the last year, trading between $45.98 and $68.87.

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