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Will Solid Chip Revenues Buoy Qualcomm (QCOM) Q1 Earnings?
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Qualcomm Incorporated (QCOM - Free Report) is scheduled to report first-quarter fiscal 2022 results on Feb 2, after the closing bell. In the fiscal first quarter, its Qualcomm CDMA Technologies (“QCT”) segment is likely to have witnessed solid revenue growth owing to a ramp-up in 5G-enabled chips and strength in its Snapdragon portfolio.
Factors at Play
The QCT segment includes CDMA-based integrated circuit devices (chips) used mainly in smartphones, wireless data access cards, infrastructure equipment and system software for wireless voice and data communications and GPS products.
The company is likely to have recorded strong demand in emerging product categories such as XR and wearables along with 4G and 5G mobile broadband devices and rapid adoption of Wi-Fi 6. During the quarter, Qualcomm launched its latest 5G mobile platform — Snapdragon 8 Gen 1. Featuring advanced 5G, AI, gaming, camera and Wi-Fi and Bluetooth technologies, the Snapdragon 8 is likely to transform the next generation of flagship mobile devices. The new mobile platform brings unparalleled connectivity, photography, AI, gaming, sound and security experiences to a smartphone. With more than 50 Snapdragon Elite Gaming features, Snapdragon 8 delivers ultra-smooth responsiveness and HDR scenes.
It also unveiled the Snapdragon G3x Gen 1 Gaming Platform for gamers to enjoy their favorite games on the go. The platform combines all the Snapdragon Elite Gaming Technologies to create a new category of gaming devices. It brings superior performance to run all Android games, play content from cloud gaming libraries and stream games from home console or PC. It features the Qualcomm Adreno GPU to run games at an ultra-smooth 144 frames per second. Qualcomm FastConnect 6900 Mobile Connectivity with Wi-Fi 6 and 6E offers fast upload and download speeds. Such innovative products are likely to have translated into higher revenues in the quarter.
In the fiscal first quarter, Qualcomm inked an agreement with BMW Group to bring the latest advancements in driver assistance technologies and products of its Snapdragon Ride Platform to its next generation of Advanced Driver Assistance Systems (ADAS) and automated driving (AD) platforms. BMW's next-generation AD stack will be based on the Snapdragon Ride vision system-on-chip, vision perception and ADAS central compute SoC controllers managed by Qualcomm Car-2-Cloud services platform. It also inked a deal to deploy its Snapdragon Automotive Cockpit Platform in the new PEUGEOT 308 vehicles. With power-efficient CPU cores, it forms the critical building blocks of future automobile designs and provides a scalable architecture that addresses the domain convergence of infotainment and driving systems. The new PEUGEOT 308 vehicles will benefit from crystal clear graphics, high-resolution and immersive 4K touchscreen displays integrated with Qualcomm’s Snapdragon Automotive Cockpit Platform. These are likely to get reflected in the upcoming results.
The company is witnessing healthy traction in EDGE networking that helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets. The automotive telematics and connectivity platforms, digital cockpit, and C-V2X solutions are also fueling emerging automotive industry trends such as the growth of connected vehicles, the transformation of the in-car experience and vehicle electrification. Qualcomm believes that it is on track to become the largest smartphone RF front-end supplier by revenues in the near future.
However, the company expects an impact on device shipment due to the lengthening of handset replacement rates stemming from the chip shortage and supply chain disruptions. This, in turn, is likely to have affected unit volumes to some extent.
Overall Expectations
The Zacks Consensus Estimate for revenues from QCT segment is pegged at $8,728 million, indicating a significant improvement from $6,533 million reported in the year-ago quarter. Management expects QCT revenues in the range of $8.4 billion to $8.9 billion. Segment income before taxes is pegged at $2,970 million, implying a significant rise from $1,919 million reported in the prior-year quarter.
For the first quarter of fiscal 2022, Qualcomm expects GAAP revenues of $10-$10.8 billion. The Zacks Consensus Estimate for the same is pegged at $10,450 million, indicating growth of 26.9% from the year-ago quarter’s reported figure. Management anticipates non-GAAP earnings of $2.90-$3.10 per share. The consensus mark for earnings is currently pegged at $3.01 per share. Qualcomm recorded non-GAAP earnings of $2.17 per share in the prior-year quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for Qualcomm for the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $3.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for Unity Software Inc. (U - Free Report) is +21.05% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Feb 3.
The Earnings ESP for Meta Platforms, Inc. is +2.52% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 2.
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Will Solid Chip Revenues Buoy Qualcomm (QCOM) Q1 Earnings?
Qualcomm Incorporated (QCOM - Free Report) is scheduled to report first-quarter fiscal 2022 results on Feb 2, after the closing bell. In the fiscal first quarter, its Qualcomm CDMA Technologies (“QCT”) segment is likely to have witnessed solid revenue growth owing to a ramp-up in 5G-enabled chips and strength in its Snapdragon portfolio.
Factors at Play
The QCT segment includes CDMA-based integrated circuit devices (chips) used mainly in smartphones, wireless data access cards, infrastructure equipment and system software for wireless voice and data communications and GPS products.
The company is likely to have recorded strong demand in emerging product categories such as XR and wearables along with 4G and 5G mobile broadband devices and rapid adoption of Wi-Fi 6. During the quarter, Qualcomm launched its latest 5G mobile platform — Snapdragon 8 Gen 1. Featuring advanced 5G, AI, gaming, camera and Wi-Fi and Bluetooth technologies, the Snapdragon 8 is likely to transform the next generation of flagship mobile devices. The new mobile platform brings unparalleled connectivity, photography, AI, gaming, sound and security experiences to a smartphone. With more than 50 Snapdragon Elite Gaming features, Snapdragon 8 delivers ultra-smooth responsiveness and HDR scenes.
It also unveiled the Snapdragon G3x Gen 1 Gaming Platform for gamers to enjoy their favorite games on the go. The platform combines all the Snapdragon Elite Gaming Technologies to create a new category of gaming devices. It brings superior performance to run all Android games, play content from cloud gaming libraries and stream games from home console or PC. It features the Qualcomm Adreno GPU to run games at an ultra-smooth 144 frames per second. Qualcomm FastConnect 6900 Mobile Connectivity with Wi-Fi 6 and 6E offers fast upload and download speeds. Such innovative products are likely to have translated into higher revenues in the quarter.
In the fiscal first quarter, Qualcomm inked an agreement with BMW Group to bring the latest advancements in driver assistance technologies and products of its Snapdragon Ride Platform to its next generation of Advanced Driver Assistance Systems (ADAS) and automated driving (AD) platforms. BMW's next-generation AD stack will be based on the Snapdragon Ride vision system-on-chip, vision perception and ADAS central compute SoC controllers managed by Qualcomm Car-2-Cloud services platform. It also inked a deal to deploy its Snapdragon Automotive Cockpit Platform in the new PEUGEOT 308 vehicles. With power-efficient CPU cores, it forms the critical building blocks of future automobile designs and provides a scalable architecture that addresses the domain convergence of infotainment and driving systems. The new PEUGEOT 308 vehicles will benefit from crystal clear graphics, high-resolution and immersive 4K touchscreen displays integrated with Qualcomm’s Snapdragon Automotive Cockpit Platform. These are likely to get reflected in the upcoming results.
The company is witnessing healthy traction in EDGE networking that helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets. The automotive telematics and connectivity platforms, digital cockpit, and C-V2X solutions are also fueling emerging automotive industry trends such as the growth of connected vehicles, the transformation of the in-car experience and vehicle electrification. Qualcomm believes that it is on track to become the largest smartphone RF front-end supplier by revenues in the near future.
However, the company expects an impact on device shipment due to the lengthening of handset replacement rates stemming from the chip shortage and supply chain disruptions. This, in turn, is likely to have affected unit volumes to some extent.
Overall Expectations
The Zacks Consensus Estimate for revenues from QCT segment is pegged at $8,728 million, indicating a significant improvement from $6,533 million reported in the year-ago quarter. Management expects QCT revenues in the range of $8.4 billion to $8.9 billion. Segment income before taxes is pegged at $2,970 million, implying a significant rise from $1,919 million reported in the prior-year quarter.
For the first quarter of fiscal 2022, Qualcomm expects GAAP revenues of $10-$10.8 billion. The Zacks Consensus Estimate for the same is pegged at $10,450 million, indicating growth of 26.9% from the year-ago quarter’s reported figure. Management anticipates non-GAAP earnings of $2.90-$3.10 per share. The consensus mark for earnings is currently pegged at $3.01 per share. Qualcomm recorded non-GAAP earnings of $2.17 per share in the prior-year quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for Qualcomm for the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $3.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
QUALCOMM Incorporated Price and EPS Surprise
QUALCOMM Incorporated price-eps-surprise | QUALCOMM Incorporated Quote
Zacks Rank: Qualcomm has a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Alphabet Inc. (GOOGL - Free Report) is set to release quarterly numbers on Feb 1. It has an Earnings ESP of +2.11% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Unity Software Inc. (U - Free Report) is +21.05% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Feb 3.
The Earnings ESP for Meta Platforms, Inc. is +2.52% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.