Cell phone chip vendor Qualcomm (QCOM) this afternoon reported sales for its fiscal fourth quarter ending September 28th that were ahead of estimates thanks to a settlement of a patent dispute.


But the forecast for Q1 of fiscal ‘09 is looking positively ugly, with revenue set to fall in a big way.


Qualcomm shares had initially been down over 8% in after-hours trading but seem to be recovering, falling just $1.28, or a little over 3%, to $31.75. The shares fell 6% during the regular session.


Q4 sales of $3.33 billion and profit per share of 63 cents beat an average estimate of $2.86 billion and 60 cents. Bear in mind that that $3.33 billion includes a $560 million revenue item from a settlement of patent licensing dispute with Nokia (NOK), a boost that likely was not factored into many estimates. Without that settlement, the quarter’s revenue was just $2.77 billion, which would be well below estimates.


For the fiscal first quarter ending in December, the company sees revenue falling year-over-year as much as 6%, for a range of $2.3 billion to $2.5 billion, well below analysts’ $2.9 billion estimate. The company forecasts profiter per share, excluding some costs, to fall between 4% and 12%, in a range of 46 cents to 52 cents. That’s well below the 61-cent estimate analysts have been hanging onto. For the full fiscal year ending in September of 2009, the company is forecasting sales in a range of $10.2 to $10.8 billion, which is a decrease of 3% to 8%. Analysts have been projecting a rise of 14% in revenue, to $12.16 billion.


Profit per share is expected to fall between 7% and 11% in fiscal ‘09, to $2.00 to $2.11, a range well below the $2.59 analysts forecast.


In the company’s press release, chief executive Paul Jacobs says “our guidance reflects slower end-market device growth for 2009 than previously anticipated and a significant contraction in channel inventory in the first and second fiscal quarters.” He goes on to say that strong growth for CDMA-based phones “driven by a shift to emerging markets” nevertheless “is meaningfully less than we would have forecast just a few weeks ago.”


Source : http://blogs.barrons.com/