Earnings Preview: Cell phone chipmaker Qualcomm seen rising to 2nd-quarter profit

Earnings Preview: Qualcomm to report 2Q results

NEW YORK — Qualcomm Inc., a maker of chips and software for cell phones, reports its fiscal second-quarter results after the stock market closes on Wednesday.

WHAT TO WATCH FOR: Qualcomm’s stock has been on a rough ride. It lost nearly a quarter of its value in the month after the company reported first-quarter earnings in late January. Qualcomm warned on that earnings call that the subdued economic recovery forced it to pull back slightly on its 2010 forecast.

Qualcomm later lifted its outlook for the fiscal second quarter that ended in March. The forecast is now about where it was before January’s warning. But the stock has recovered only about half of its dip, and has far to go before it again reaches the 12-month high of $49.80 it hit in mid-January.

In early March, Qualcomm said it would buy back $3 billion in stock. It also boosted its quarterly dividend by 2 cents to 19 cents per share.

WHY IT MATTERS: Though not a household name, Qualcomm’s reach extends into nearly every facet of the modern wireless industry. It sells chips that connect cell phones to their networks, and if the manufacturer doesn’t buy from Qualcomm, it most likely still pays the company for the right to use its patented technology. The San Diego company’s software also runs on millions of phones.

WHAT’S EXPECTED: Analysts surveyed by Thomson Reuters expect Qualcomm to earn 57 cents per share, excluding items, on $2.63 billion in revenue.

Qualcomm has said it expects earnings of 56 cents to 58 cents per share, on revenue of $2.55 billion to $2.65 billion.

LAST YEAR’S QUARTER: Qualcomm posted a loss of 18 cents per share on $2.46 billion in revenue. The loss was due to a legal settlement with competitor Broadcom Corp.