Qualcomm outlook off, cites increasing competition

* Q4 Rev $2.69 bln vs Wall St view $2.72 bln

* Sees FY rev $10.5 bln-$11.3 bln vs Wall St view $11.6 bln

* Extends deal with Samsung

* Sees competition intensifying, slower phone replacements

* Shares rise in after-hours trading

By Sinead Carew

NEW YORK, Nov 4 - Wireless chip supplier Qualcomm Inc <QCOM.O> on Wednesday forecast weaker than expected full-year results, but its extension of a key deal with Korea's Samsung Electronics <005930.KS> helped offset the disappointment for some investors.

The company said aggressive competition in the mobile phone chip market would hurt its profits next year along with slowing handset upgrades by consumers against the backdrop of a lackluster rebound from the recession.

"The kind of revenue growth and earnings growth we've projected for the coming year is lower than Qualcomm has experienced for the last several years," Chief Financial Officer Bill Keitel told Reuters. "Competition is very intense and we expect the level of competitiveness to edge up."

Keitel did not name rivals but analysts said Qualcomm would likely come under pressure from Taiwan's Mediatek <2454.TW> and VIA Technologies <2388.TW> in China and from U.S.-based rivals Texas Instruments <TXN.N> and Broadcom Corp <BRCM.O>.

While the outlook was below published analyst estimates, some analysts noted that given Qualcomm's share-price decline of 9 percent since late September, many investors had already priced weak guidance into the share price.

Others suggested that Qualcomm's guidance for the year may prove to be conservative if the recovery speeds up.

"If the macroeconomy is a little better than expected next year there's potential for upside to their guidance," said Piper Jaffray analyst Michael Walkley.

But another analyst said that Samsung, a top Qualcomm client, managed to negotiate a cheaper technology licensing rate.

"It's good news they've extended, but I'm fairly confident the terms aren't that favorable to Qualcomm," Charter Equity Research analyst Ed Snyder said.

"The guidance for this quarter was light and the full-year guidance is a bit discouraging, light on revenue and significantly light on earnings," he added.

SLOW REBOUND

Samsung said in a separate statement that it would make a $1.3 billion down payment to Qualcomm under the new agreement but neither company would disclose the phone maker's ongoing royalty rates. [ID:nSEL002738]

Company executives told analysts on a conference call that the company was happy with the value it is getting from the new 15-year Samsung pact, which includes current wireless technology standards as well as next-generation technologies.

Qualcomm forecast full-year revenue of $10.5 billion to $11.3 billion, below Wall Street expectations for revenue of $11.61 billion, according to Thomson Reuters I/B/E/S.

The company said it expected earnings of $2.10 to $2.30 per share in the full year of 2010, below the $2.32 expected by analysts on average.

"What we're seeing is a slower rebound than what we've seen in prior recessions," Keitel said during an analyst call.

Qualcomm's net profit fell to $803 million or 48 cents per share in the fiscal fourth quarter ended Sept. 27, from $878 million or 52 cents per share in the year-ago quarter.

Analysts on average had expected earnings of 52 cents per share, according to Thomson Reuters I/B/E/S.

Revenue fell to $2.69 billion in the fourth quarter from $3.34 billion a year ago, when it reported a $560 million payment from Nokia <NOK1V.HE> from a legal settlement. Wall Street had expected revenue of $2.72 billion,

After closing at $41.60 on Nasdaq on Wednesday, Qualcomm shares rose to $42.30 in after-hours trading. (Additional reporting by So Eui Rhee in Seoul; Editing by Carol Bishopric, Phil Berlowitz)