Qualcomm Inc., the biggest maker of mobile-phone chips, forecast fiscal second-quarter sales that would be higher than analysts’ predictions amid growing demand for smartphones.
Sales for the second quarter ending in March will rise to a range of $4.6 billion to $5 billion, the San Diego-based company said Wednesday in a statement reporting first-quarter earnings. Analysts were expecting $4.51 billion, the average of estimates in a Bloomberg survey.
Qualcomm’s ownership of code division multiple access, or CDMA, technology gives the company the ability to charge royalties on all 3G phones and networks, providing the majority of its profit. Qualcomm is also the largest seller of modem chips, which connect phones to mobile networks.
“It owns the right market,” said Daniel Berenbaum, an analyst at MKM Partners LP in Stamford, Connecticut, who recommends buying Qualcomm stock. “Smartphones are clearly the premier growth area.”
Qualcomm rose 1.3 percent to $59.56 at the close in New York. The stock has gained 8.1 percent in the past year.
The company, with customers that include Samsung Electronics Co. and Apple Inc., also supplies applications processors, the chips that run programs in mobile phones and is trying to sell bulked up versions for use in larger machines such as personal computers.
Qualcomm’s fiscal first-quarter net income rose to $1.4 billion, or 81 cents a share, from $1.17 billion, or 71 cents, a year earlier. Revenue climbed 40 percent to $4.68 billion in the period, which ended Dec. 31. Analysts on average projected profit of 75 cents a share and sales of $4.6 billion.
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