Qualcomm Earnings Top Estimates

By Chris Lange Updated Jan 13, 2:29PM EST · Published Jan 27, 4:25PM EST

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Qualcomm Earnings Top Estimates — © Thinkstock

Qualcomm Inc. (NASDAQ: QCOM) reported fiscal first-quarter financial results after the markets closed on Thursday. The company had $0.97 in earnings per share (EPS) on $5.8 billion in revenue, compared to consensus estimates from Thomson Reuters that called for $0.90 in EPS on $5.69 billion in revenue. The same period from the previous year had $1.34 in EPS on $7.10 billion in revenue.

On the books cash, cash equivalents and marketable securities totaled $30.6 billion at the end of the first quarter of fiscal 2016, compared to $31.6 billion a year ago and $30.9 billion at the end of the fourth quarter of fiscal 2015.

Qualcom noted in its report:

In January 2016, we announced an agreement with TDK Corporation to form a joint venture to enable delivery of radio frequency front-end (RFFE) modules and RF filters into fully integrated products for mobile devices and Internet of Things (IoT) applications, among others. The joint venture will initially be owned 51% by Qualcomm and 49% by TDK. The purchase price upon close of the transaction is $1.2 billion, to be adjusted for working capital, outstanding indebtedness and certain capital expenditures, among other things. Additionally, we have the option to acquire (and TDK has an option to sell) TDK’s interest in the joint venture for $1.15 billion 30 months after the closing date. The transaction is subject to regulatory approvals and other closing conditions and is expected to close by early 2017

In terms of guidance, Qualcom expects the fiscal second quarter to have $1.40 in EPS on $6.9 billion in revenue. There are consensus estimates from Thomson Reuters that call for $1.02 in EPS on $5.69 billion in revenue.
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Steve Mollenkopf, CEO of Qualcomm, commented:

We delivered a stronger than expected quarter with earnings per share above the high end of our initial estimates, driven by better than expected 3G/4G reported device sales and benefits realized from cost actions across the Company. We signed several new license agreements in China and are on track with our cost reduction initiatives. Design traction for our new Snapdragon 820 processor continues to be strong, and we expect improving trends in our chipset business in the second half of fiscal 2016.

Shares of Qualcomm closed Wednesday at $47.53, with a consensus analyst price target of $61.83 and a 52-week trading range of $44.39 to $74.09. Following the release of the earnings report, the stock was initially down 0.8% at $47.15 in the after-hours trading session.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.