LOS ANGELES (AP) -- Shares of chipmaker Qualcomm Inc. rose Thursday after the company reported second-quarter earnings that were better than analysts' forecasts and it raised its guidance for the current quarter on the strength of demand for its mobile communications chips and patents.
THE SPARK: Qualcomm said Wednesday that net income in the three months through March came to nearly $1 billion, up 29 percent from a year ago. Excluding one-time items, the company earned 86 cents per share, better than the 80 cents per share that analysts surveyed by FactSet were expecting.
For the current quarter, the company expects net income of 68 cents per share to 72 cents per share, excluding items. Analysts had predicted 69 cents per share. Qualcomm sees revenue of $3.35 billion to $3.65 billion, ahead of the $3.40 billion that analysts had been forecasting.
Analysts were upbeat on prospects for the San Diego-based company, whose Snapdragon processor is used widely in smartphones and tablet computers. Qualcomm chips are inside Apple Inc.'s iPhone and more than half of all new smartphones based on Google Inc.'s rival Android operating system.
"We think Qualcomm is in the middle of a protracted run," said Kaufman Bros. analyst Mike Burton in a Thursday research note.
Burton raised his adjusted earnings estimate for the June quarter by a penny to 70 cents per share and reiterated his "Buy" rating and $65 price target on the shares.
THE BIG PICTURE: Qualcomm chips are at the nexus of a mobile computing revolution. Its Snapdragon mobile processor is being used in a new tablet by Hewlett-Packard Co. Some 20 tablets that use the chip are in development. The chip is also being used in smartphones that use Microsoft's Windows Phone 7 software.
SHARE ACTION: Shares of Qualcomm rose $1.65, or 3 percent, to $56.92 in afternoon trading Thursday.