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Qualcomm's 2Q numbers, outlook lets down investors

SAN DIEGO (AP) -- Qualcomm Inc.'s latest quarterly earnings and forecast fell in line with analyst estimates, disillusioning investors spoiled by the company's recent run of success as the growing popularity of smartphones fueled the demand for its mobile microprocessors.

After the numbers came out late Wednesday, Qualcomm's stock fell by nearly 6 percent.

The negative reaction to the results and projections released underscore the challenges that Qualcomm is facing as it strives to maintain the growth that enabled it to surpass Intel Corp. as the world's most valuable chip company last year. Intel recently reclaimed those bragging rights.

Although smartphone sales are still climbing Qualcomm is now facing fiercer competition from other chip makers, including Intel, which has been redesigning its microprocessors in an attempt to grab a bigger piece of the mobile computing market.

Qualcomm delivered a solid performance during the three-month period ending in March, but the numbers were not as far ahead of analyst projections as they have been in other recent quarters.

The company, which is based in San Diego, earned $1.87 billion, or $1.06 per share, in its fiscal second quarter. That represented a 16 percent drop from net income of $2.23 billion, or $1.28 per share, at the same time last year.

If not for certain accounting items, Qualcomm said it would have earned $1.17 to match the average estimates of analysts surveyed by FactSet. That was a letdown, based on Qualcomm's recent track record. The company's adjusted earnings had been three cents to 13 cents per share higher than the average analyst estimate in 12 of the previous 13 quarter leading up to Wednesday's report.

Qualcomm's latest quarterly revenue rose 24 percent from last year to $6.12 billion — about $40 million higher than analysts anticipated, according to FactSet.

For the current quarter ending in June, the company expects its adjusted earnings to range from 97 cents to $1.05 per share on revenue ranging from $5.8 billion to $6.3 billion. Analysts had predicted adjusted earnings of $1.04 per share on revenue of $5.87 billion.

Qualcomm's stock shed $3.80 to $62.20 in Wednesday's extended trading.