Qualcomm shares jump after 3rd-quarter results beat expectations

Qualcomm stock up after strong 3Q earnings report

NEW YORK — Shares of Qualcomm Inc. advanced Thursday after the wireless technology bellwether posted fiscal third-quarter earnings and revenue above Wall Street’s expectations.

THE SPARK: Qualcomm had disappointed investors in the first two quarters of its fiscal year as declining mobile phone prices ate into royalty payments the company receives from phone makers. But its third-quarter revenue declined less than analysts expected, and the company raised its profit and revenue estimates for 2010.

THE BIG PICTURE: Like many other technology companies, Qualcomm is benefiting from a recovering economy. The growing popularity of high-end smart phones is also helping boost results.

THE ANALYSIS: “We were pleasantly surprised by the strength in average selling prices and believe that the continued worldwide adoption of 3G (third-generation wireless phones) will help to maintain a solid mix into the next fiscal year,” wrote Standard & Poor’s telecommunications equity analyst James Moorman in a note to investors. He has a “Buy” rating on Qualcomm.

Morgan Keegan analyst Tavis C. McCourt said Qualcomm’s stock price could return to the high $40s if it can get double-digit growth back, but added “we’d like to see two consecutive good quarters before getting more aggressive with our rating.”

SHARE ACTION: Shares of the San Diego-based company rose $2.90, or 8 percent, to $39.06 in midday trading. The stock has traded in the 52-week range of $31.63 to $49.80.