Qualcomm assuaged investors' fears Tuesday with an announcement they will meet or exceed estimates for the fourth quarter. Shares of Qualcomm Inc. (Nasdaq: QCOM) fell nearly 8 percent Monday after the wireless telecommunications provider pulled out of an investor conference, leaving investors fearing bad news ahead.
Shares in the digital wireless communications provider recovered 8 1/4 to 161 1/2, or 5 percent Tuesday morning.
Qualcomm said demand for its Code Division Multiple Access (CDMA) chipsets and phones has picked up in the fourth quarter, and based on current performance in each of its business units, earnings from operations will meet or exceed analyst consensus estimates of 87 cents a share.
Qualcomm also said discussions are underway with companies interested in its terrestrial-based phone business, which has been reducing margins due to increased competition, parts shortages and industry consolidation, the company said. It hopes to sell the unit by the end of the calendar year.
The company is taking further steps to improve margins which may result in a non-recurring charge to earnings, the company added. It is also reassigning personnel from its consumer products division to CDMA Technologies (Applications Specific Integrated Circuits) to support its expanding business in wireless data activities.
Investors got skittish when Qualcomm dropped out of the investor conference in Boston Monday morning, "People read into that that they are going to have a bad quarter or something," according to Mark Cavallone, an analyst with the S&P Equity Group in New York.
A spokeswoman for the San Diego, Calif.-based company said the conference no-show was due to a scheduling conflict. She declined to comment on the decline in the share price.
Reuters contributed to this report