UPDATE 3-Qualcomm profit, revenue beat forecasts

* Q3 proforma share $0.57 vs analysts view $0.54

* Q3 revenue $2.71 bln vs Wall Street view $2.63 bln

* Sales helped by Google Android phones

* Eyes alternatives for Flo TV

* Qualcomm shares rise 4.8 pct after hours
(Adds company and analyst comments, byline, updates share
price)

By Sinead Carew

NEW YORK, July 21 (BestGrowthStock) – Cellphone chip supplier
Qualcomm Inc’s (QCOM.O: ) fiscal third-quarter earnings and
revenue beat Wall Street estimates on strong smartphone demand,
sending its shares up 4.8 percent after hours.

In particular, sales of phones based on Android software
from Google Inc (Read more about Google Stock Analysis) (GOOG.O: ) helped boost Qualcomm’s sales as these
devices need more complicated, expensive chips.

Qualcomm said it was looking for alternatives for its
mobile video network, which has been a disappointment for the
company. But investors focused on its strong profit and
revenue.

“It was a really good quarter,” said Pacific Crest analyst
James Faucette. “Demand is picking up a little bit, especially
in the smartphone segment. Qualcomm’s tied to Android, so as
Android phone sales increase it’s good for Qualcomm.”

Qualcomm cited devices like Droid Incredible from HTC Corp
(2498.TW: ) and phones from Sony Ericsson, a Sony Corp (6758.T: )
and Ericsson (ERIAF.PK: ) venture. U.S. wireless provider Verizon
Wireless, a venture of Verizon Communications Inc (VZ.N: ) and
Vodafone Group Plc (VOD.L: ), sells Incredible.

Earnings rose to $767 million, or 47 cents per share, for
the quarter ended June 27, from $737 million, or 44 cents per
share, a year ago.

Excluding unusual items and its investment arm, Qualcomm
earned 57 cents per share, above analysts’ average expectation
for 54 cents, according to Thomson Reuters I/B/E/S.

Revenue fell to $2.71 billion from $2.75 billion over the
same period, but beat analysts’ expectations for $2.63
billion.

Chief Financial Officer Bill Keitel told Reuters in an
interview that smartphone demand was strong enough in markets
such as China and the United States that it more than offset
earnings pressure related to weakness of the euro against the
U.S. dollar.

“We’re selling a bit more of our more capable chipsets so
that’s had a favorable impact,” Keitel said. “China and the US
are growing pretty strongly for more capable devices.”

Qualcomm shares rose 4.8 percent to $37.9 in extended
trading after the news, after closing down 1.61 percent at
$36.16 in regular Nasdaq trade.

Faucette said the share rise was likely partly a relief
rally as Qualcomm shares have fallen more than 12 percent since
April on concerns about weaker growth prospects.

The San Diego-based chip and technology license supplier
said it was in talks with a number of potential partners and
would consider “any alternatives” for its Flo TV business, a
mobile video broadcast network it built to boost demand for
advanced chips.

Alternatives could include a sale of the entire operation
or the related airwaves licenses, according to Qualcomm, which
recently said that Flo TV demand was a disappointment as too
few consumers were willing to pay monthly fees for the
service.

Chief Executive Paul Jacobs told analysts on a conference
call that Qualcomm aims within a year to have an alternative
for Flo TV, in which it has invested at least $800 million to
establish. It has not disclosed financial results from the
venture.

“There’s definitely some assets there. It’s a question of
what the price is they’re going to get,” said FBN analyst
Michael Burton.

Burton said the best hope for Flo TV would be if a new
owner found a way to offer the service free to consumers. He
cited Asia as an example of mobile TV working when it was
free.

Qualcomm estimated earnings per share, excluding unusual
items, for the current quarter of 55 cents to 59 cents on
revenue of $2.67 billion to $2.93 billion compared with
analysts’ expectations for earnings of 57 cents per share on
revenue of $2.767 billion

Keitel said he expects smartphone demand to continue to
increase for the rest of the calendar year, building up to a
strong fourth quarter holiday season.

“For this calendar year we are optimistic about a continued
increase in the rate of new (advanced) phones sold worldwide,”
Keitel said.

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(Reporting by Sinead Carew; Editing by Richard Chang)

UPDATE 3-Qualcomm profit, revenue beat forecasts