'Clash of Clans' maker Supercell buys majority stake in UK's Space Ape
HELSINKI Finnish mobile game maker Supercell has acquired a majority stake in London-based game studio Space Ape, the British company said on its website.
SAN FRANCISCO Leading mobile chipmaker Qualcomm forecast earnings below expectations on Wednesday as competition in smartphones intensifies and shifts toward Asia, and its stock fell sharply.
San Diego-based Qualcomm is benefiting from strong demand for smartphones and a shift by network operators worldwide to a high-speed wireless technology known as long-term evolution (LTE), where the chipmaker is ahead of rivals.
But the market potential is attracting growing competition from smaller rivals eager to expand their mobile presence in Asia and other developing regions.
Qualcomm said it expects full-year revenue of $24.0 billion to $25 billion, up from its prior forecast of between $23.4 billion and $24.4 billion.
But investors focused on its full-year earnings per share forecast, which fell short of some expectations.
"You're seeing revenue upside but not the earnings upside you'd want to come with it," said Bernstein analyst Stacy Rasgon. "Whether it's because of competition or they're investing to stop competition, either way - it can lead to margin decline."
With investors concerned that Apple's growth may be slowing, shares of Qualcomm, which makes chips for the iPhone, have risen about 7 percent this year, less than the 13 percent increase in the Philadelphia Semiconductor index.
Smartphone shipments are increasing, but less quickly than last year. The global smartphone market is likely to expand 27 percent this year, less than the 46 percent growth last year, according to IDC.
Qualcomm's chips are not only found in high-end devices like the iPhone and Samsung Electronics' soon-to-launch Galaxy S4. They are also are used in lower-priced handsets popular in Asia and other developing areas that are expected to drive future smartphone growth as the United States reaches saturation.
Low-cost handsets weigh on Qualcomm's profitability. Manufacturers of lower-cost phones pay lower royalties for Qualcomm's network technology and also buy cheaper components from the chipmaker, instead of its top-tier offerings.
The growing importance of developing countries also means Qualcomm will face more challenges from Mediatek, Spreadtrum Communications and other chipmakers that are improving their technology and are happy to sacrifice profits in exchange for market share in Asia.
"When you're trying to stay on top, and you've got players trying to knock you off, you have to spend to stay there," Williams Financial analyst Cody Acree said of Qualcomm.
Qualcomm said it expects full-year earnings per share between $4.40 and $4.55. Analysts expected $4.54, according to Thomson Reuters I/B/E/S.
It reported fiscal second-quarter revenue of $6.12 billion, an increase of 24 percent from a year ago. It said revenue in the current quarter would be between $5.8 billion and $6.3 billion.
Analysts on average expected second-quarter revenue of $6.085 billion and third-quarter revenue of $5.883 billion.
Qualcomm said second-quarter net income was $1.87 billion, down 16 percent year over year. It said earnings per share were $1.06. Its non-GAAP earnings per share were $1.17, in line with expectations.
Shares of Qualcomm fell 6 percent to $61.80 in extended trade after closing up 1 percent at $66.00.
(Reporting By Noel Randewich; Editing by Steve Orlofsky)
Uber Technologies Inc [UBER.UL] said on Tuesday it underpaid its New York City drivers for the past two-and-a-half years, an error that could cost the ride-hailing company tens of millions of dollars.
DUBAI/FRANKFURT Dubai's Emaar Malls will buy a 51 percent stake in e-commerce fashion website Namshi from Global Fashion Group (GFG), a start-up set up by Rocket Internet, for $151 million as competition for technology deals heats up in the Middle East.