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Qualcomm (QCOM) Up 6.6% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Qualcomm Incorporated (QCOM - Free Report) . Shares have added about 6.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Qualcomm Q2 Earnings Beat Estimates, Revenues Miss
Qualcomm Inc., the largest manufacturer of wireless chipsets based on baseband technology in the U.S., reported mixed financial results for the second quarter of fiscal 2017 (ended Mar 31, 2017) wherein the bottom line outshined the Zacks Consensus Estimate but the top line missed the same.
Net Income
On a GAAP basis, quarterly net income came in at $749 million or $0.50 per share compared with $1,164 million or $0.78 in the year-ago quarter. Adjusted earnings per share (excluding special items) were $1.20, ahead of the Zacks Consensus Estimate of $1.05. Moreover, the bottom line plunged 34.83% on a year-over-year basis.
Revenue
Total quarterly revenue of $5,016 million not only decreased 9.64% year over year, but also failed to beat the Zacks Consensus Estimate of $5,876.8 million.
Segment-wise, Qualcomm Code Division Multiple Access (CDMA) Technologies contributed $3,676 million to revenues in the second quarter of fiscal 2017 compared with $3,337 million in the prior-year quarter and reported EBT margin of 13%. Qualcomm Technology Licensing generated $2,249 million in revenues, up 5% year over year, and reported quarterly EBT margin of 87%, which was flat year over year.
Chipset Statistics
During the fiscal second quarter, Qualcomm shipped approximately 179 million CDMA-based MSM (Mobile Station Modem) chipsets, reflecting a decline of 5% year over year. The company shipped 398–402 million 3G/4G handsets in the reported quarter, up 19% year over year. The average selling price of a 3G/4G handset with an in-built Qualcomm chipset during the quarter was around $204–$210, flat year over year.
Operating Metrics
Quarterly operating income came in at $729 million compared with $1,415 million in the year-ago quarter. Quarterly operating margin was 14.5% compared with 25.5% in the prior-year quarter. Quarterly adjusted EBT was $857 million compared with $1,470 million in the year-ago quarter.
Cash Flow
During the second quarter of fiscal 2017, Qualcomm generated $815 million of cash from operating activities versus $737 million at the end of Mar 2016.
Liquidity
At the end of second-quarter fiscal 2017, Qualcomm had $28.9 billion of cash, cash equivalents and marketable securities compared with $30.0 billion a year ago and $29.8 billion at the end of first-quarter fiscal 2017.
Total outstanding debt was $12,380 million at the end of the reported quarter compared with $10,903 million at the end of Sep 2016.
Dividend Payment to Stockholders
During the second quarter of fiscal 2017, the company returned nearly $1.1 billion to stockholders. This included $782 million ($0.53 per share) of cash dividend and another $283 million through repurchases of 4.8 million shares of common stock.
On Apr 12, 2017, the company announced a quarterly cash dividend of $0.57 per common share, payable on Jun 21, 2017, to stockholders of record at the closure of business on May 31, 2017. This dividend payment is based on the 7.5% hike in the last quarterly dividend declared on Mar 8, 2017.
Third-Quarter Fiscal 2017 Outlook
Third-quarter fiscal 2017 revenues are estimated in the range of $5.3–$6.1 billion. GAAP earnings per share are estimated between $0.67 - $0.92 . Non-GAAP earnings per share are estimated between $0.90 and $1.15. Qualcomm is expected to ship 180–200 million MSM chipsets in the ongoing quarter.
How Have Estimates Been Moving Since Then?
Following the release, investors witnessed a downward trend in fresh estimates. There have been five revisions lower for the current quarter.
At this time, the stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Qualcomm (QCOM) Up 6.6% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Qualcomm Incorporated (QCOM - Free Report) . Shares have added about 6.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Qualcomm Q2 Earnings Beat Estimates, Revenues Miss
Qualcomm Inc., the largest manufacturer of wireless chipsets based on baseband technology in the U.S., reported mixed financial results for the second quarter of fiscal 2017 (ended Mar 31, 2017) wherein the bottom line outshined the Zacks Consensus Estimate but the top line missed the same.
Net Income
On a GAAP basis, quarterly net income came in at $749 million or $0.50 per share compared with $1,164 million or $0.78 in the year-ago quarter. Adjusted earnings per share (excluding special items) were $1.20, ahead of the Zacks Consensus Estimate of $1.05. Moreover, the bottom line plunged 34.83% on a year-over-year basis.
Revenue
Total quarterly revenue of $5,016 million not only decreased 9.64% year over year, but also failed to beat the Zacks Consensus Estimate of $5,876.8 million.
Segment-wise, Qualcomm Code Division Multiple Access (CDMA) Technologies contributed $3,676 million to revenues in the second quarter of fiscal 2017 compared with $3,337 million in the prior-year quarter and reported EBT margin of 13%. Qualcomm Technology Licensing generated $2,249 million in revenues, up 5% year over year, and reported quarterly EBT margin of 87%, which was flat year over year.
Chipset Statistics
During the fiscal second quarter, Qualcomm shipped approximately 179 million CDMA-based MSM (Mobile Station Modem) chipsets, reflecting a decline of 5% year over year. The company shipped 398–402 million 3G/4G handsets in the reported quarter, up 19% year over year. The average selling price of a 3G/4G handset with an in-built Qualcomm chipset during the quarter was around $204–$210, flat year over year.
Operating Metrics
Quarterly operating income came in at $729 million compared with $1,415 million in the year-ago quarter. Quarterly operating margin was 14.5% compared with 25.5% in the prior-year quarter. Quarterly adjusted EBT was $857 million compared with $1,470 million in the year-ago quarter.
Cash Flow
During the second quarter of fiscal 2017, Qualcomm generated $815 million of cash from operating activities versus $737 million at the end of Mar 2016.
Liquidity
At the end of second-quarter fiscal 2017, Qualcomm had $28.9 billion of cash, cash equivalents and marketable securities compared with $30.0 billion a year ago and $29.8 billion at the end of first-quarter fiscal 2017.
Total outstanding debt was $12,380 million at the end of the reported quarter compared with $10,903 million at the end of Sep 2016.
Dividend Payment to Stockholders
During the second quarter of fiscal 2017, the company returned nearly $1.1 billion to stockholders. This included $782 million ($0.53 per share) of cash dividend and another $283 million through repurchases of 4.8 million shares of common stock.
On Apr 12, 2017, the company announced a quarterly cash dividend of $0.57 per common share, payable on Jun 21, 2017, to stockholders of record at the closure of business on May 31, 2017. This dividend payment is based on the 7.5% hike in the last quarterly dividend declared on Mar 8, 2017.
Third-Quarter Fiscal 2017 Outlook
Third-quarter fiscal 2017 revenues are estimated in the range of $5.3–$6.1 billion. GAAP earnings per share are estimated between $0.67 - $0.92 . Non-GAAP earnings per share are estimated between $0.90 and $1.15. Qualcomm is expected to ship 180–200 million MSM chipsets in the ongoing quarter.
How Have Estimates Been Moving Since Then?
Following the release, investors witnessed a downward trend in fresh estimates. There have been five revisions lower for the current quarter.
Qualcomm Incorporated Price and Consensus
QUALCOMM Incorporated Price and Consensus | QUALCOMM Incorporated Quote
VGM Scores
At this time, the stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.