Qualcomm Q1 shines, raises outlook for year

Qualcomm delivered strong fiscal first quarter results as it continues to ride the wave of smartphone and tablet sales.

The company has a lead with LTE/4G processors and it's showing up in the results.

For the first quarter, Qualcomm reported earnings of $1.91 billion, or $1.09 a share, on revenue of $6.02 billion, up 29 percent from a year ago. On a non-GAAP basis, Qualcomm reported earnings of $1.26 a share. Wall Street was looking for first quarter earnings of $1.13 a share on revenue of $5.9 billion.

As expected, Qualcomm cashed in on smartphone sales and the chipsets that go with them. In a statement, Qualcomm CEO Dr. Paul E. Jacobs said the company is positioned for strong growth courtesy of its Qualcomm Snapdragon 800 and 600 processors.

On a conference call with analysts, Jacobs talked about future growth prospects, the importance of China and keeping the innovation pipeline humming. Jacobs said:

With increased penetration of data-centric devices and higher usage, we continue to see robust growth in wireless data. In order to address this growing demand, we remain focused on addressing what we call 'The 1000 Exadata Challenge.' We're working to expand wireless data capacity by 1000 times from its current level. We believe that small cells operating in a licensed spectrum band, and using advanced interference management techniques on a dynamic basis, will be an important component in meeting the challenge.

In the first quarter, Qualcomm had chip shipments of 182 million units, up 17 percent from a year ago.

Qualcomm also spent $1.1 billion on research and development, or 18 percent of revenue.

As for the outlook, Qualcomm projected second quarter revenue of $5.8 billion to $6.3 billion with non-GAAP earnings of $1.10 a share to $1.18 a share. Wall Street was looking for second quarter earnings of $1.10 a share on revenue of $5.88 billion.

Qualcomm sees second quarter MSM chip shipments of 163 million to 173 million.

For fiscal 2013, Qualcomm also raised its outlook. The company now sees revenue of $23.4 billion to $24.4 billion and non-GAAP earnings of $4.25 a share to $4.45 a share. That outlook was also better than expectations.

Separately, Qualcomm said that Bill Keitel will retire as CFO. George Davis, CFO at Applied Materials, will replace Keitel on March 11. Keitel will stay as an advisor to ease the transition.