Qualcomm sees double-digit growth for next five years

NEW YORK Thu Nov 15, 2012 3:26pm EST

NEW YORK (Reuters) - Chip supplier Qualcomm Inc (QCOM.O) said on Thursday that it expects a compound annual growth rate of at least 10 percent for its revenue and earnings per share over the next five years.

Chief Executive Paul Jacobs said he expects continued growth from sales of chips for devices including smartphones and tablet computers despite a weak global economy.

Due to increasing demand for these devices, Jacobs said during his presentation at the company's annual investor day, the weak economy has had a "somewhat muted" effect on Qualcomm.

"The fact they're still looking at strong growth, that they have relatively conservative assumptions behind that growth, is promising," said Bernstein analyst Stacy Rasgon.

Given that semiconductor companies such as Intel Corp (INTC.O) and Texas Instruments (TXN.O) have been giving bleak forecasts in their quarterly reports, Rasgon said Qualcomm's guidance looked impressive compared with his expectations for the semiconductor industry.

"We're going to be lucky if semiconductors are flat next year and they're guiding up," he said.

Rasgon said he was relieved Qualcomm was not forecasting a big dip in operating margins for its chip business from its 2012 margin of 18.9 percent. Its slides showed a forecast for 2013 margins in a range of 18.5 percent to 20.5 percent.

On November 7 Qualcomm reported fiscal year 2012 earnings per share of $3.51, up 39 percent from the year before and revenue of $19.12 billion, up 28 percent from the year before. Its fiscal year ended September 30.

The executive also said that he doesn't seen any reason to change Qualcomm's dividend policy and that the company would balance its return of money to shareholders between dividends and share buybacks.

In its fiscal year 2012 it bought back about $1.3 billion worth of stock and paid out $1.6 billion in dividends.

Qualcomm shares were down 0.7 percent at $61.31 in afternoon trade on Nasdaq. In comparison the .SOX index of semiconductor stocks was down more than 1 percent.

(Reporting by Sinead Carew; Editing by G Crosse and PM Berlowitz)

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