Qualcomm’s Good Enough Earnings (QCOM)

Qualcomm Incorporated (NASDAQ: QCOM) has just beaten earnings expectations for its fiscal third quarter and raised guidance for the fourth quarter.  The CDMA chipset leader reported adjusted earnings of $0.57 EPS on revenues of $2.71 billion, which compares to Thomson Reuters estimates of $0.54 EPS and $2.63 billion in revenues.

Qualcomm now sees its fourth quarter at $0.39 to $0.43 EPS, or $0.55 to $0.59 on an adjusted EPS basis, with revenues of $2.67 to $2.93 billion.  The Thomson Reuters estimates are $0.57 EPS and $2.77 billion in revenues.

Qualcomm has raised its fiscal 2010 targets to a new range of $2.33 billion to $2.37 EPS and $10.7 to $11.0 billion in revenues.  Thomson Reuters has estimates of $2.31 EPS and $10.72 billion in revenues.

Cash, cash equivalents, and marketable securities were $17.6 billion at the end of the quarter.  MSM Shipments rose 10% to 103 million units.  Operating cash flow fell 13% at $951 million and operating income was down 11% at $792 million.

While there is not an earth-shattering beat nor an incredibly higher guidance, the price of Qualcomm stock must have already discounted the news.  Shares closed down 1.6% at $36.16 versus a 52-week range of $31.63 to $49.80.  They  are trading up above $37.50 in the initial reaction in the after-hours session.

JON C. OGG