Qualcomm Guidance Takes Shares Lower (QCOM)

Qualcomm (NASDAQ:QCOM) reported earnings after the close today with $0.54 EPS and $2.31 Billion revenues, while First Call had $0.53 EPS and $2.26 Billion in revenues as consensus.  The company said this excluded $0.02 and $0.05 in charges and $0.20 earnings from items, and its tax rate was 19%.

Qualcomm shipped a record 253 million Mobile Station Modem chips, a 22% year-over-year increase.  Qualcomm’s cash and equivalents were approximately $11.8 billion at the end of the fourth quarter.  At September 30, $1.5 billion remained authorized for repurchases  and from October 1, 2007 through November 7, 2007 it repurchased and retired 13 million shares of common stock for approximately $525 million.

Because of legal disputes, Qualcomm now estimates shipments of 89 million handsets reported in fourth quarter fiscal 2007, compared to its prior estimate of 92 million handsets; its average sale price is still at an expected $218 per unit.

The company’s guidance is $0.50 to $0.52 EPS and $2.3 to $2.4 Billion in revenues, while First Call has estimates pegged at $0.52 EPS and $2.38 Billion revenues.  It now puts MSM shipments at 74 to 78 million and CDMA/WCDMA handset units shipped at 95 to 98 million with an ASP of $212 per unit.

It is offering some longer-term Pro Forma guidance for fiscal 2008 of $2.03 to $2.09 EPS and $9.5 to $9.8 Billion in revenues, while First Call has estimates pegged at $2.18 EPS and $9.84 Billion in revenues; and its ASP for CDMA/WCDMA handsets is approximately $199 per unit..  It is now offering annual guidance for 2008 CDMA/WCDMA handset shipments for Calendar 2008 at 492 to 522 million.

This report is a bit harder to track because of some numbers being backed out from the Nokia situation, and because of some "calendar December year-end data compared to Fiscal year-end data of September.  Qualcomm closed down almost 3.5% at $39.76, but because of the guidance and individual metrics from the pending suits shares are down about 7% in after-hours around $37.00.

Jon C. Ogg
November 8, 2007