Is This China-Focused Smartphone Chip Maker Still a Bargain?

From The Motley Fool

By Sarfaraz A. Khan
Research Assistant: G. Yousuf
Includes Spreadtrum Communications (NASDAQ:SPRD), Skyworks Solutions (NASDAQ:SWKS) and Qualcomm (NASDAQ:QCOM) 

Prior to releasing its first-quarter’s results, the Asia-focused baseband communication chips manufacturer Spreadtrum Communications (NASDAQ: SPRD) significantly increased its guidance for the second quarter. The company cited strong growth in low-cost smartphones in the emerging markets, particularly China. As a result, its shares rose by 21% in after-hours trading.

Spreadtrum now expects revenue for the current quarter will increase by 42.9% to 47.1% from the second quarter of 2012 to a range of $270 million to $278 million. Previously, Spreadtrum was expecting revenue of between $220 million and $228 million.

Spreadtrum’s rally has also caused a rise in shares of other wireless-chip manufacturer and sellers with exposure to emerging markets, such as Skyworks Solutions (NASDAQ: SWKS)and the largest seller of mobile-phone chips Qualcomm (NASDAQ: QCOM).