Qualcomm shares fall after drop in sales forecast
Qualcomm Inc. shares stumbled Thursday after the chip maker scaled back its sales forecast for 2010.
The stock fell $5.91, or 13 percent, to $41.29 in morning trading.
Qualcomm, which makes chips and other technology found in many cell phones, said it is seeing only a "subdued" economic recovery. It cut its sales projection for the year to between $10.4 billion and $11 billion for the fiscal year ending in September, down from $10.5 billion to $11.3 billion.
Still, its quarterly earnings came in ahead of Wall Street expectations and analysts were upbeat on the results.
The company made a profit of 62 cents per share, excluding unusual items. Analysts, who typically leave one-time losses or gains out of their estimates, were looking for 56 cents.
Jefferies & Co. analyst Adam Benjamin reiterated a "Buy" rating on the company's stock in a note to clients Thursday. He said Qualcomm is best positioned to benefit as cell phone makers and service providers upgrade to faster networks and that competition is "floundering."
Ittai Kidron, of Oppenheimer & Co., suggested investors take advantage of the stock decline and buy more shares. He pointed out the company's profit margins are holding up and predicted it will take a growing share of the chip market.
Copyright 2010 AP News
