Qualcomm profit falls, cuts '09 revenue target

NEW YORK (Reuters) - QUALCOMM (QCOM.NQ)Inc posted a lower quarterly net profit due to a hefty charge for investment losses and cut its revenue outlook for the current fiscal year on weakening demand for cell phone chips, sending its shares down 6.1 percent.

Qualcomm said it would not issue a forecast for earnings per share for the year ending in September because market volatility had made it too difficult to predict how its investments would fare in the current environment.

"Their biggest concern looks to be the impairment of some of their assets," said Charter Equity Research analyst Ed Snyder. "It's a little discouraging on the forecast but it's a smart move to lower guidance now."

Qualcomm said it took a first-quarter charge of about 21 cents a share after determining on December 28 that it had a loss of $388 million related to marketable securities. The loss was equivalent to 3 percent of the recorded values of its cash and equivalents. Qualcomm also had $1.1 billion in unrealized losses in marketable securities between December 28 and January 23.

Qualcomm, the biggest maker of chips for cell phones, said on Wednesday its net profit was $341 million, or 20 cents per share, for its fiscal first quarter ended December 28, compared with $767 million, or 46 cents a share, in the same quarter a year ago.

Revenue rose to $2.52 billion from $2.44 billion, and was ahead of analysts' average estimate of $2.419 billion according to Reuters Estimates.

The company cut its outlook for full-year 2009 revenue to a range of $9.3 billion to $9.8 billion from $10.2 billion to $10.8 billion, a range that was already well below earlier analysts expectations.

But Snyder, who had upgraded the stock to 'buy' ahead of the news, said the outlook may prove conservative as the weak economy makes it difficult to predict demand.

"They have maybe 10 weeks of visibility into the channel at the best of times so since there's only about six weeks of visibility now, venturing a forecast for a year out is a fool's errand," he said.

Qualcomm said it expects second-quarter revenue to fall to a range of $2.25 billion to $2.45 billion, compared with the average analyst estimate of $2.4 billion, according to Reuters Estimates.

Earlier this week, rival wireless chip maker Texas Instruments Inc announced 3,400 job cuts, or 12 percent of its workforce, as it forecast weak chip demand and poor visibility of future demand.

Qualcomm shares fell 6 percent to $34.57 in extended trading after closing at $36.82 on Nasdaq.

(Reporting by Sinead Carew; editing by Richard Chang)