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SAN FRANCISCO (Reuters) - Qualcomm Inc (QCOM.O) raised its forecasts for second-quarter and 2011 revenue as sales of its chips for wireless devices accelerate, and its shares rose more than 6 percent.
The company, whose chips are used by mobile device makers including Apple (AAPL.O) and HTC (2498.TW), raised its forecast for fiscal 2011 revenue by at least 5 percent to $13.6 billion to $14.2 billion, surpassing Wall Street's estimate of $12.8 billion.
Qualcomm had earlier forecast fiscal 2011 revenue of up to $13 billion.
The San Diego-based company has said it expected to boost revenue and earnings per share by at least 10 percent a year over the next five years on the back of accelerating demand for chips in smartphones and tablet computers.
"Not only was their quarter much better than expected but guidance for next quarter is even better," said Charter Equity Research analyst Ed Snyder. "All the suffering of a year ago has paid off in much bigger design wins, and now those are all coming to fruition."
Qualcomm vies with the likes of Texas Instruments TXN.N and Nvidia (NVDA.O) in supplying chips for smartphones, tablets and other wireless devices, sales of which have boomed as consumers rapidly adopt mobile gadgets, sometimes in place of desktop computers. link.reuters.com/fax25r
Executives told analysts on a conference call that the company's dual-core chip designs will begin to ramp up later in the fiscal first half of 2011 across "multiple manufacturers."
The increasing popularity of smartphones using high-performance processors has helped boost Qualcomm's average selling prices for its chips, although analysts warn that could slow as competition increases.
Qualcomm faces fierce competition from smaller rival Nvidia in getting its processors into upcoming tablets running Google's (GOOG.O) Android operating system.
Verizon Wireless is set to start selling a new version of Apple's popular iPhone 4 in early February, and it is expected to include a key chip made by Qualcomm.
Qualcomm expects revenue for the current, fiscal second quarter to rise to between $3.45 billion and $3.75 billion, above the $3.1 billion expected by analysts. It projected earnings per share of between 77 cents and 81 cents, also outpacing the Street's target of 68 cents.
Qualcomm revenue rose to $3.35 billion in the December quarter, up 25 percent from the year-ago quarter. That was above analysts' average estimate of $3.2 billion, according to Thomson Reuters I/B/E/S.
It posted net income of $1.17 billion for the first quarter ended December 26, up 39 percent from a year earlier. Excluding items, Qualcomm earned 82 cents per share, up 32 percent year over last year.
Shares in the company rose to $54.81 after closing up 0.66 percent at $51.86 on the Nasdaq.
Editing by Edwin Chan and by Steve Orlofsky, Phil Berlowitz