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Qualcomm (QCOM) Q1 Earnings Beat on Solid 5G Chip Demand
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Qualcomm Incorporated (QCOM - Free Report) reported solid first-quarter fiscal 2021 results with record earnings, primarily driven by the ramp-up in 5G-enabled chips. Both the top and bottom-line figures increased year over year, backed by the strength of the business model and the ability to respond pro-actively to the evolving market scenario.
Net Income
On a GAAP basis, net income in the December quarter more than doubled to $2,455 million or $2.12 per share from $925 million or 80 cents per share in the prior-year quarter. The significant improvement in GAAP earnings was primarily attributable to top-line growth driven by surging demand of 5G products across handsets, along with higher automotive and IoT revenues.
Quarterly non-GAAP net income came in at $2,510 million or $2.17 per share compared with $1,151 million or 99 cents in the year-ago quarter. Undeterred by the adverse impact of the virus outbreak, record high non-GAAP earnings per share were largely driven by higher revenues across the board. The bottom line exceeded management’s guidance and beat the Zacks Consensus Estimate by 7 cents.
QUALCOMM Incorporated Price, Consensus and EPS Surprise
On a GAAP basis, total revenues in the fiscal first quarter were $8,235 million compared with $5,077 million in the prior-year quarter. The radical increase in revenues was driven by 5G ramp up, higher sales to Apple Inc. (AAPL - Free Report) and rise in automotive and IoT revenues with diligent execution of operational plans and resilient business culture acting as catalysts.
Non-GAAP revenues in the reported quarter were $8,226 million compared with $5,057 million in the year-earlier quarter. The figure missed the consensus mark of $8,316 million but was within the company’s guided range, driven by 5G strength, high-performing core chipsets and new RF front-end content.
Segment Results
Quarterly revenues from Qualcomm CDMA Technologies (QCT) improved 81% year over year to $6,533 million driven by strength in handsets and higher demand in adjacent platforms beyond mobile (RF front-end, automotive and IoT), coupled with higher chip shipments despite adverse coronavirus impacts. EBT margin increased to 29% from 13%.
Qualcomm Technology Licensing (QTL) revenues totaled $1,660 million, up 18% year over year, driven by higher royalty revenues from Huawei, better-than-expected global handset shipments and a favorable OEM mix. EBT margin was 77% compared with 72% in the year-ago quarter on top-line growth.
Cash Flow & Liquidity
Qualcomm generated $3,175 million of net cash from operating activities in first-quarter fiscal 2021 compared with $1,118 million a year ago. At quarter end, the company had $7,076 million in cash and cash equivalents and $15,231 million of long-term debt.
Guidance
For the second quarter of fiscal 2021, Qualcomm expects GAAP revenues of $7.2-$8 billion. Non-GAAP earnings are projected to be $1.55-$1.75 per share, while GAAP earnings are likely to be $1.17-$1.37 per share, buoyed by the Huawei settlement. Revenues from QTL are expected between $1.25 billion and $1.45 billion. For QCT, the company anticipates revenues between $6 billion and $6.5 billion.
Clearfield delivered a trailing four-quarter earnings surprise of 62.6%, on average.
Sonim pulled off a trailing four-quarter earnings surprise of 2.2%, on average.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Qualcomm (QCOM) Q1 Earnings Beat on Solid 5G Chip Demand
Qualcomm Incorporated (QCOM - Free Report) reported solid first-quarter fiscal 2021 results with record earnings, primarily driven by the ramp-up in 5G-enabled chips. Both the top and bottom-line figures increased year over year, backed by the strength of the business model and the ability to respond pro-actively to the evolving market scenario.
Net Income
On a GAAP basis, net income in the December quarter more than doubled to $2,455 million or $2.12 per share from $925 million or 80 cents per share in the prior-year quarter. The significant improvement in GAAP earnings was primarily attributable to top-line growth driven by surging demand of 5G products across handsets, along with higher automotive and IoT revenues.
Quarterly non-GAAP net income came in at $2,510 million or $2.17 per share compared with $1,151 million or 99 cents in the year-ago quarter. Undeterred by the adverse impact of the virus outbreak, record high non-GAAP earnings per share were largely driven by higher revenues across the board. The bottom line exceeded management’s guidance and beat the Zacks Consensus Estimate by 7 cents.
QUALCOMM Incorporated Price, Consensus and EPS Surprise
QUALCOMM Incorporated price-consensus-eps-surprise-chart | QUALCOMM Incorporated Quote
Revenues
On a GAAP basis, total revenues in the fiscal first quarter were $8,235 million compared with $5,077 million in the prior-year quarter. The radical increase in revenues was driven by 5G ramp up, higher sales to Apple Inc. (AAPL - Free Report) and rise in automotive and IoT revenues with diligent execution of operational plans and resilient business culture acting as catalysts.
Non-GAAP revenues in the reported quarter were $8,226 million compared with $5,057 million in the year-earlier quarter. The figure missed the consensus mark of $8,316 million but was within the company’s guided range, driven by 5G strength, high-performing core chipsets and new RF front-end content.
Segment Results
Quarterly revenues from Qualcomm CDMA Technologies (QCT) improved 81% year over year to $6,533 million driven by strength in handsets and higher demand in adjacent platforms beyond mobile (RF front-end, automotive and IoT), coupled with higher chip shipments despite adverse coronavirus impacts. EBT margin increased to 29% from 13%.
Qualcomm Technology Licensing (QTL) revenues totaled $1,660 million, up 18% year over year, driven by higher royalty revenues from Huawei, better-than-expected global handset shipments and a favorable OEM mix. EBT margin was 77% compared with 72% in the year-ago quarter on top-line growth.
Cash Flow & Liquidity
Qualcomm generated $3,175 million of net cash from operating activities in first-quarter fiscal 2021 compared with $1,118 million a year ago. At quarter end, the company had $7,076 million in cash and cash equivalents and $15,231 million of long-term debt.
Guidance
For the second quarter of fiscal 2021, Qualcomm expects GAAP revenues of $7.2-$8 billion. Non-GAAP earnings are projected to be $1.55-$1.75 per share, while GAAP earnings are likely to be $1.17-$1.37 per share, buoyed by the Huawei settlement. Revenues from QTL are expected between $1.25 billion and $1.45 billion. For QCT, the company anticipates revenues between $6 billion and $6.5 billion.
Zacks Rank & Stocks to Consider
Qualcomm currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader industry are Clearfield, Inc. (CLFD - Free Report) and Sonim Technologies, Inc. (SONM - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Clearfield delivered a trailing four-quarter earnings surprise of 62.6%, on average.
Sonim pulled off a trailing four-quarter earnings surprise of 2.2%, on average.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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