Qualcomm’s results fail to impress investors

San Diego’s Qualcomm posted mixed results on Wednesday for its fiscal second quarter ended March 31, with earnings beating Wall Street’s forecast but revenue falling a bit short.

In addition, the company’s outlook for the current quarter raised investor concerns about future growth. Qualcomm’s shares dipped more than 4 percent in after-hours trading.

The San Diego wireless giant had a strong quarter in its chip set business – powered by demand worldwide for its semiconductors used in fast, 4G LTE smartphones. Qualcomm sold 188 million chipsets – a 9 percent increase over the same quarter last year.

But Qualcomm’s outlook for its technology licensing business, where the company collects royalties for use of its wireless patents, lagged expectations. Device sales were particularly soft in North America and China.

The company also said it had received notice that federal investigators had recommended that the U.S. Securities and Exchange Commission pursue a civil action against Qualcomm for allegedly making bribes to Chinese state-owned companies. Qualcomm said it has filed a rebuttal explaining why it doesn’t believe it violated the Foreign Corrupt Practices Act.

For its second quarter, Qualcomm’s revenue increased 4 percent to $6.37 billion compared with the same quarter last year. Net income reached $2.26 billion, or $1.31 per share, excluding certain changes such as stock compensation.

Analysts predicted revenue of $6.4 billion and earnings of $1.22 per share, excluding charges.

“We delivered another solid quarter, driven by demand for our leading multi-mode 3G/LTE chip set solutions,” said Chief Executive Steve Mollenkopf in a statement.

In Qualcomm’s licensing business, device sales failed to meet expectations in North America because fewer consumers upgraded to new smartphones. In China, consumers put off purchases of new phones in anticipation of the roll out of new high speed 4G LTE networks this year. Consumers also took advantage of clearance sales on older model phones on which Qualcomm does not collect royalties.

Qualcomm reaffirmed its full-year revenue forecast of $26 billion to $27.5 billion and raised its full-year earnings per share forecast slightly to $5.05 to $5.25 per share, excluding charges.

The company said the timing of China’s 4G LTE expansion has been slower than anticipated. Therefore, the gains that the company expects to see from 4G LTE in China will be pushed back to the fall and winter months.

For the quarter ending June 30, Qualcomm forecasts revenue of $6.2 billion to $6.8 billion and earnings per share of $1.15 to $1.25 per share, excluding charges.

Wall Street analysts predicted revenue of $6.59 billion and earnings of $1.25 per share for the June quarter.

The company ended the quarter with $32.1 billion in cash. Qualcomm released results Wednesday after markets closed. Its shares ended trading at $80.71 but fell to $77.03 — a 4.5 percent decline — in early after-hours trading.