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Here’s Why Qualcomm Shares Are Popping in After-Hours Trading

July 20, 2016, 8:21 PM UTC
Courtesy: Qualcomm

(Reuters) – Qualcomm forecast current-quarter profit largely above market estimates as demand for its mobile chips rose and the company made progress with its licensees in China.

Shares of the company (QCOM), which also posted a better-than-expected third-quarter profit, rose 5.5% in extended trading on Wednesday.

The company said it expected to earn $1.05 to $1.15 per share in the fourth quarter, compared with analysts’ average estimate of $1.08, according to Thomson Reuters I/B/E/S.

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The San Diego-based chipmaker, which has been struggling with slowing smartphone sales and stiff competition from Chinese and Taiwanese rivals, reported its first revenue rise in five quarters.

“Our chipset business is also benefiting from a strong new product ramp across tiers, particularly with fast-growing OEMs in China,” CEO Steve Mollenkopf said in a statement.

Revenue rose to $6.04 billion quarter ended June 26 from $5.83 billion a year earlier.

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Revenue in its licensing business, which is the company’s biggest driver of profit, rose 8.9%.

Excluding items, the company earned $1.16 cents per share, compared with analysts estimate of 97 cents.

Net Income attributable to Qualcomm rose to $1.44 billion, or 97 cents per share, from $1.18 billion, or 73 cents per share.