A month has gone by since the last earnings report for Qualcomm (QCOM Quick QuoteQCOM - Free Report) . Shares have added about 11.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Qualcomm 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 drivers.

Qualcomm Beats Q1 Earnings Estimates on Solid Revenues

Qualcomm reported relatively healthy first-quarter fiscal 2024 results, with the bottom and top lines beating the respective Zacks Consensus Estimate, driven by healthy demand trends in Android handsets and automotive businesses. Both metrics improved year over year, led by the strength of the business model, revenue diversification and the ability to respond proactively to the evolving market scenario.

Net Income

On a GAAP basis, net income in the December quarter improved to $2,767 million or $2.46 per share from $2,235 million or $1.98 per share in the prior-year quarter. The increase in GAAP earnings was primarily attributable to top-line growth.

Quarterly non-GAAP net income came in at $3,101 million or $2.75 per share compared with $2,684 million or $2.37 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 37 cents.

Revenues

On a GAAP basis, total revenues in the fiscal first quarter were $9,935 million compared with $9,463 million in the prior-year quarter. The quarterly revenues beat the consensus mark of $9,505 million. Despite soft industrial IoT demand patterns, Qualcomm registered record automotive revenues owing to solid momentum from the Snapdragon Digital Chassis platform. Strength within the handset business also buoyed the top line. Non-GAAP revenues in the reported quarter were $9,922 million compared with $9,456 million in the year-earlier quarter.

Segment Results

Quarterly revenues from Qualcomm CDMA Technologies (QCT) were up 7% year over year to $8,423 million, as strength in the automotive platform and higher demand in handsets was partially offset by channel inventory drawdown within the IoT business. The segment’s revenues exceeded our revenue estimates of $8,056.4 million. The company witnessed solid market traction in the EDGE networking business that helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets.

Automotive revenues rose 31% to $598 million, driven by increased content in new vehicle launches with its Snapdragon Digital Chassis platform. This was the 13th consecutive quarter in which Qualcomm recorded double-digit growth in automotive revenues. Handset revenues were up 16% to $6,687 million, primarily led by the increased deployment of the Snapdragon 8 Gen 3 mobile platform in new Android flagship launches. However, IoT revenues were down 32% to $1,138 million due to the channel inventory drawdown. EBT margin for the QCT segment rose to 31% from 28%.

Qualcomm Technology Licensing (QTL) revenues totaled $1,460 million, down 4% year over year due to lower licensing revenues. The segment’s revenues beat our estimates of $1,356.1 million. EBT margin declined to 74% from 73%.

Cash Flow & Liquidity

Qualcomm generated $2,949 million of net cash from operating activities in the fiscal first quarter compared with $3,095 million a year ago. At quarter-end, the company had $8,133 million in cash and cash equivalents and $14,566 million of long-term debt. The company repurchased 6 million shares for $784 million during the quarter.

Q2 Guidance

For the second quarter of fiscal 2024, Qualcomm expects GAAP revenues of $8.9-$9.7 billion due to market stabilization, recovery in market demand and portfolio strength. Non-GAAP earnings are projected to be $2.20-$2.40 per share, while GAAP earnings are likely to be $1.73-$1.93 per share. Revenues from QTL are expected to be between $1.2 billion and $1.4 billion. For QCT, the company anticipates revenues between $7.6 billion and $8.2 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, Qualcomm has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Qualcomm has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Qualcomm is part of the Zacks Wireless Equipment industry. Over the past month, Juniper Networks (JNPR Quick QuoteJNPR - Free Report) , a stock from the same industry, has gained 0.4%. The company reported its results for the quarter ended December 2023 more than a month ago.

Juniper reported revenues of $1.36 billion in the last reported quarter, representing a year-over-year change of -5.8%. EPS of $0.61 for the same period compares with $0.65 a year ago.

For the current quarter, Juniper is expected to post earnings of $0.39 per share, indicating a change of -18.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Juniper. Also, the stock has a VGM Score of F.