However, the San Diego chipmaker also projected weaker-than-anticipated fiscal third-quarter per-share earnings, causing shares to drop 6.9 percent to $61.45 in after-hours trading.
The forecast raised worries that Qualcomm's expenses are increasing at a time the average selling price of devices is falling. Qualcomm generates a significant amount of its earnings from royalties for its 3G code division multiple access technology, and the price of devices impacts its licensing fees. Analysts also fretted about the impact the rising popularity of low-cost phones and heightened competition are having on margins.
"One of the long-term bear cases on the stock is chipset competition hits pricing and margins," Bernstein analyst Stacy Rasgon said. He said the margin in Qualcomm's semiconductor business -- 17 percent -- was in line with his expectations but could worry some investors as the amount is much lower than the 26 percent margin posted in the first quarter.
"I would have liked to see some more [earnings] leverage," Rasgon added.
Qualcomm isn't exactly a household name, but the odds are fairly high that many homes have at least one device that uses its chips. The company dominates the market for providing wireless processors, like those in 3G CDMA and 4G LTE devices. It also makes application processors for smartphones and tablets. Its chips are used in Apple's newest devices, and it also powers all Windows Phone 8 products. The newest BlackBerry products use Qualcomm chips, as does the U.S. version of Samsung's Galaxy S4 device.
There have been concerns that the smartphone industry's growth is slowing, but Qualcomm hasn't shown many signs of weakness. The company remains one of the only LTE providers in the industry, and its diverse customer base should help buffer it from a soft economy. However, Qualcomm likely will face more competition as rivals introduce LTE chips, and there are some upcoming Chinese vendors that could prove to be a big threat in the key emerging markets.
For now, Qualcomm continues to dominate the industry. Chief Executive Paul Jacobs noted during a call with analysts that 850 devices have been released or announced that use Qualcomm chips, and there's another 475 in the pipeline.
"It's a bit of an investment period, but we're still producing growth during that investment period," President Steve Mollenkopf said during a conference call with analysts.
Meanwhile, the average selling price for devices slid to $214 to $220 per unit in the December quarter from $224 to $230 per unit in the September quarter. Qualcomm reports device shipment and pricing figures a quarter delayed. The December period is the most recent data available from the company.
"We saw a bit of a downward trend in ASPs in Q2, though in line with what we expected," Derek Aberle, the head of Qualcomm's licensing business said during a conference call with analysts. "As we look at the back half of the year, we're expecting a rebound in ASPs as compared to Q2."
He added that Qualcomm has seen more volatility in average selling prices because of the timing of launches for "iconic high-end devices." That likely includes the upcoming Galaxy S4 and previous iPhone releases.
And Mollenkopf noted that from the first quarter to the second, the company saw a bit of a weaker mix with more units coming from emerging markets than developed nations. He said, however, that Qualcomm isn't seeing significant competitive threats in 4G LTE as some analysts and investors have worried.
For the fiscal second quarter ended March 31, Qualcomm reported net income fell to $1.87 billion, or $1.06 share, from $2.23 billion, or $1.28 a share, a year earlier.
Excluding items like acquisition-related charges, earnings rose to $1.17 a share, from $1.01 a share a year ago. Qualcomm in January had projected fiscal second-quarter adjusted earnings of $1.10 to $1.18 a share.
Revenue soared 24 percent to $6.12 billion, above the midpoint of Qualcomm's estimates for $5.8 billion to $6.3 billion.
The company shipped 173 million chipsets during the period, up 14 percent from the previous year and at the high end of its projections for 163 million to 173 million.
Looking forward, Qualcomm expects fiscal third-quarter adjusted earnings of 97 cents to $1.05 on revenue of $5.8 billion to $6.3 billion. Analysts anticipate per-share earnings of $1.04 on revenue of $5.88 billion, according to Yahoo Finance.
Qualcomm again boosted its outlook for the fiscal year. It now expects adjusted earnings of $4.40 to $4.55 a share, up from January's forecast for $4.25 to $4.45 a share. It also anticipates revenue of $24 billion to $25 billion, up from its earlier expectation of $23.4 billion to $24.4 billion.