Qualcomm Inc.’s share price up, projects Q4 profit that falls short of analysts’ expectations amid China challenge

Qualcomm Inc. posted a projection for its profit over the fourth quarter of the current fiscal year, that fell short of analysts forecasts, as the company faced challenging conditions for its technology-licensing business located in China.

The company, which is currently the largest mobile-phone chips manufacturer, shared that its net income over the quarter ending September is projected to be in the range from 1.03 to 1.18 dollars per share. This estimate falls short from the median analysts forecast of earnings of 1.23 dollars a share.

According to Qualcomms statement, the companys profit over the third quarter that ended June 29th rose by 42% and reached 2.24 billion dollars, which makes 1.31 dollars per share. The company also said that its sales over the quarter rose 9% and reached 6.81 billion dollars. The analysts expectations amounted to earnings of 1.06 dollars a share on sales of 6.52 billion dollars.

According to the companys statement, a record number of chips were shipped over the quarter. Qualcomm reported to have shipped 225 million chips over the period, which is a 31% increase in comparison to the units shipped for the same quarter a year ago. The company said that it expects that number to increase as high as 245 million over the current quarter.

Qualcomm Inc. shared that some of its other major businesses has been facing “significant challenges” in the region of China. The President of Qualcomm Inc. Mr. Derek Aberle commented in a telephone interview, which was cited by Bloomberg: “We are experiencing some near-term challenges in the licensing business, particularly related to China. This is something that we will take care of. The timing is pretty uncertain.”

The chip sales in China were still stable, but the companys projection for the licensing business in the country was still reduced. Mr. Steve Mollenkopf, who is the Chief Executive Officer of the company, has been recently putting his efforts into expanding the reach of Qualcomm Inc. and its leadership in high-speed Internet-capable phone chips in the region.

According to the statement released by the company, some of the hardware companies that operate in China were affected by an official investigation launched by the antitrust regulators in China earlier in 2014. As reported by the Financial Times, Mr. George Davis, who is the companys Chief Financial Officer said on a telephone call with some analysts: “It’s clear to us that the investigation, among other things, is creating an increased level of uncertainty with the licensing base in China right now.”

Qualcomm Inc. was 0.09% up to close at 81.60 dollars per share yesterday, marking a one-year change of +30.98%. According to the information published on CNN Money, the 35 analysts offering 12-month price forecasts for Qualcomm Inc. have a median target of 88.00, with a high estimate of 100.00 and a low estimate of 50.00. The median estimate represents a +7.84% increase from the last price of 81.60.