Qualcomm Inc. gained a bigger market value than Intel Corp. for the first time after it forecast results that topped analysts’ predictions, adding to evidence that smartphones are gaining ground at the expense of computers.
Shares of San Diego-based Qualcomm (Nasdaq: QCOM) rose as much as 8.1 percent, the biggest intraday increase in a year, giving the largest seller of mobile-phone semiconductors a market capitalization of about $106 billion, higher than Intel’s (Nadaq: INTC) $105 billion. Qualcomm shares closed Thursday at $60.67. Shares of Intel have slumped 14 percent.
Qualcomm reached the milestone after forecasting earnings and sales this quarter that showed robust demand for handheld devices. Under Chief Executive Officer Paul Jacobs, the company is gaining as consumers in developed nations snap up pricey new phones while those in emerging markets upgrade to devices that provide Web access. Intel, a laggard in the market for mobile-phone chips, is being hurt by slack personal-computer sales.
“Qualcomm has absolutely been one of the prime beneficiaries in smartphones and tablets,” said Mike Burton, an analyst at Brean Capital LLC. “This is a very strong report.”
The company said in a statement yesterday that this quarter’s earnings will be 90 cents to 98 cents a share on revenue of $5.6 billion to $6.1 billion. Analysts on average had projected net income of 86 cents on sales of $5.33 billion, according to data compiled by Bloomberg.
Qualcomm’s Jacobs said earnings are being bolstered by strong worldwide demand for smartphones, emerging-market consumers upgrading to more expensive handsets and increasing supply of his latest chips. The company sees those trends persisting next year, even though its projections are based on a “conservative” view of global economic growth, he said.
“There are a lot of trends that are coming together for us,” Jacobs said in a telephone interview. “Demand continues to go up.”
The company is also generating more revenue from its licenses, which cover the technology that provides high-speed data connections in smartphones.
Qualcomm had said earlier this year that limited supply from contract manufacturer Taiwan Semiconductor Manufacturing Co. was requiring it to increase spending and enlist other vendors. Shortages had forced some customers to postpone the introduction of new smartphone models. Those phones are now going on sale, lifting Qualcomm’s chip sales and licensing revenue.
Net income in the fourth quarter, which ended Sept. 30, was $1.27 billion, or 73 cents a share, compared with $1.06 billion, or 62 cents, a year earlier. Sales rose 18 percent to $4.87 billion. Analysts on average had predicted sales of $4.65 billion.
Profit before certain items in fiscal 2013 will be $4.12 to $4.32 a share on revenue of $23 billion to $24 billion, Qualcomm said in the statement. Analysts on average had projected profit of $4.13 a share and sales of $21.7 billion, according to data compiled by Bloomberg.
The majority of Qualcomm’s revenue comes from baseband chips, which connect phones to cellular networks, sold to wireless device makers such as Samsung Electronics Co., Apple Inc. and HTC Corp. The bulk of the company’s profit comes from the licensing of so-called code division multiple access technology, a radio-communications standard used in other chips, handsets and phone systems.