Reuters: Regulatory News: UPDATE 3-Qualcomm cuts outlook for current qtr, sees strong Dec

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UPDATE 3-Qualcomm cuts outlook for current qtr, sees strong Dec Jul 18th 2012, 22:43 Wed Jul 18, 2012 6:43pm EDT * Q3 EPS $0.85 vs Street view $0.86 * Company cuts semi volume target for Q4, eyes strong Dec quarter * Shares rise about 6 pct in late trade By Sinead Carew NEW YORK, July 18 (Reuters) - Qualcomm Inc cut its revenue and earnings forecast for the current quarter on weaker-than-expected demand for semiconductors but investors took heart as it said that sales would improve for a strong last quarter of 2012. Qualcomm shares rose 6 percent in late trade after the leading provider of chips for cellphones said it expects a "strong December quarter" as it will have overcome a shortfall in its advanced chip supply by then. The San Diego-based company is expected to supply chips for the next Apple Inc iPhone model which analysts widely expect to go on sale in time for holiday shopping. Executives told analysts on a conference call that they are still expecting strong smartphone launches to boost chip sales in the holiday season despite a tendency by consumers in Europe and North America to upgrade their phones more slowly. Qualcomm also said that lower-than-expected sales in the current quarter would be partly due to its customers' cutting inventory to prepare for future products. "They're saying everything they can to point to Apple without saying Apple," said Charter Equity Research analyst Ed Snyder. "People are looking past the current quarter into the holiday season and they like what they see." Qualcomm had warned in April that it was adding new manufacturing partners as it was unable to meet demand for some advanced cellphone chips due to a 28 nanometer manufacturing capacity shortfall at contract manufacturer TSMC. But Chief Executive Paul Jacobs told analysts on Wednesday that he had made progress in expanding manufacturing and was ramping up its supply of 28 nanometer chips. Sanford C. Bernstein analyst Stacy Rasgon said it is "not terribly surprising" that chipsets are weak this quarter. "People have been looking for an air pocket," he said. Investors also appeared to overlook CEO Jacob's admission on a conference call that it had to inform U.S. regulators investigating it that it gave gifts or other benefits to people associated with state-owned companies or agencies in China. He declined to give details. Qualcomm cut its revenue target for its fiscal full year 2012, which ends in September to a range of $18.7 billion to $19.1 billion from $18.7 billion to $19.7 billion. It cut its non-GAAP earnings per share target to a range of $3.61 to $3.67 from its prior target of $3.61 to $3.76. Another analyst, James Faucette of Pacific Crest Securities, said investors were brushing off the worse-than-expected fiscal fourth-quarter outlook and focusing on the fact "that the ramp in 28 nanometer chips is happening." Qualcomm posted a profit of $1.207 billion, or 69 cents per share for its second quarter ended June 24, compared with a profit of $1.035 billion or 61 cents per share in the year-ago quarter. Excluding certain items, Qualcomm earnings per share would have been 85 cents compared with Wall Street expectations of 86 cents, according to Thomson Reuters I/B/E/S. Revenue rose to $4.63 billion from $3.62 billion, compared with analyst expectations of $4.677 billion. Qualcomm shares rose to $59.15, almost 6 percent, in late trade after closing at $56.05 in regular Nasdaq trade. The stock had fallen 16 percent from its $66.99 close on April 18 just before it warned of the 28 nanometer shortage. Link this Share this Digg this Email Reprints

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