Qualcomm's chip sales held strong in its first fiscal quarter, prompting the company to raise its outlook despite economic headwinds that continue to buffet the United States.
Profits rose 20 percent year-over-year to $1.4 billion for the three months ended Dec. 25 on sales of $4.68 billion.
"We have completed another outstanding quarter at Qualcomm, driven by a continued 2G to 3G migration, smartphone adoption and continued strong execution across our businesses," CEO Paul Jacobs said in a conference call with analysts after market close on Wednesday.
The CDMA pioneer shipped 156 million of its MSM chipsets, up 32 percent from 2011, driven in part by demand for smartphones in China.
Its Snapdragon chips continued to find favor with smartphone manufacturers, with shipments of the popular chips growing more than 120 percent year-over-year in the fourth quarter.
Dual-mode 3G/LTE device shipments came in between 191 million and 195 million during the September quarter, with an average selling price of about $212 to $218 per unit. Total reported device sales hit $41.4 billion, up 22 percent.
Diluted earnings per share hit 81 cents, excluding a one-cent loss from its QSI segment, charges from share-based compensation and charges related to its acquisition of Atheros.
The stellar results prompted the company to raise its revenue and earnings guidance for next quarter. Qualcomm now expects sales to come in between $4.6 billion and $5 billion in its second quarter, generating earnings per share of between $1.20 and $1.26. MSM shipments are forecast to reach between 146 million and 154 million.
The results include a $1.2 billion gain on discontinued operations from Qualcomm's sale of its Flo TV spectrum to AT&T, which was completed on Dec. 27.
The close of the Flo TV deal was held up for months as the FCC examined its relationship to AT&T's attempted purchase of T-Mobile USA. The agency approved the spectrum sale shortly after AT&T abandoned the acquisition.
Aside from its financial results, Qualcomm disclosed that the Justice Department and U.S. Attorney's office in its home town of San Diego had opened a preliminary investigation into whether the company was in compliance with the Foreign Corrupt Practices Act (FCPA), which was enacted in 1998 to discourage corporations from bribing foreign officials for commercial gain.
"We believe we are in compliance with the requirements of the FCPA, and we will continue to cooperate with this investigation," Jacobs said.
Separately, Qualcomm announced Thursday that it had successfully completed the first voice call handover from an LTE mobile network to a WCDMA network using Single Radio Voice Call Continuity, a key technology for voice-over-LTE.
The call used Ericsson network equipment and a handset outfitted with a Snapdragon S4 MSM8960 3G/LTE multimode processor. Qualcomm plans to demonstrate the technology at its booth at Mobile World Congress in Barcelona later this month.