Qualcomm posts strong chip sales

LOS ANGELES — US chipmaker Qualcomm, Inc.’s quarterly profit and revenue topped Wall Street forecasts, suggesting that a slowdown in the global smartphone business might be less severe than feared after a string of weak forecasts from suppliers.

The results announced in Qualcomm’s smartphone chip business contrasted to those from major mobile phone components makers in Asia, including TSMC and SK Hynix, Inc., which have warned of slower growth in their smartphone chip divisions.

While revenue from Qualcomm’s chips division — its largest — rose 6% in the three months ended March 25, revenue from the licensing business plunged 44%, reflecting the withholding of revenue in a high-profile patent battle with Apple, Inc.

Despite the strong quarter for chip sales, the company does see some signs of weakness.

It forecast growth of about 5% in modern mobile handsets for the remainder of the year, which is lower than anticipated. Handset prices, however, are higher than expected.

“Qualcomm posted solid results, but its guidance pointed to a softer handset market, particularly in China,” said Moody’s Senior VicePresident Rick Lane.

Qualcomm also is waiting for Chinese regulators to consider its application to buy chipmaker NXP, a deal that Chief Executive Steve Mollenkopf expects to go through. If it does not, Qualcomm plans to use the cash dedicated to the deal for a share buyback. The deal was held up by diplomatic concerns between countries, rather than Qualcomm-specific concerns, he said. —