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QUALCOMM (QCOM) Up 5.7% Since Earnings Report: Can It Continue?

QCOM

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It has been about a month since the last earnings report for QUALCOMM Incorporated (QCOM - Free Report) . Shares have added about 5.7% 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 drivers.

Qualcomm (QCOM - Free Report) Q1 Earnings in Line, Revenues Fall Short

Net Income

On a GAAP basis, quarterly net income came in at $682 million or $0.46 per share compared with $1,498 million or $0.99 in the year-ago quarter. Meanwhile, adjusted (excluding special items) earnings per share were $1.06, same as the Zacks Consensus Estimate.

Revenue

Total quarterly revenue of $5,999 million increased 3.87% year over year but failed to beat the Zacks Consensus Estimate of $6,106 million. Segment-wise, Qualcomm Code Division Multiple Access (CDMA) Technologies contributed $4,101 million to revenues in the first quarter of fiscal 2017 compared with $4,096 million in the prior-year quarter and reported quarterly EBT margin of 18%. Qualcomm Technology Licensing generated $1,811 million in revenues, up 13% year over year, and reported quarterly EBT margin of 85%.

Chipset Statistics

During the fiscal first quarter, Qualcomm shipped approximately 217 million CDMA-based MSM chipsets, reflecting a decrease of 10% year over year. The company shipped 331–335 million 3G/4G handsets in the reported quarter, up 8% year over year. The average selling price of a 3G/4G handset with an in-built Qualcomm chipset during the quarter was around $186–$192, down 4% year over year.

Operating Metrics

Quarterly operating income came in at $778 million, compared with $1,685 million in the year-ago quarter. Quarterly operating margin was 13%, compared with 29.2% in the prior-year quarter. Quarterly adjusted EBT was $870 million, compared with $1,710 million in the year-ago quarter.

During the first quarter of fiscal 2017, the company returned nearly $1.2 billion to stockholders, which includes $784 million (53 cents per share) of cash dividends and another $444 million through repurchases of 6.6 million shares of common stock.

Cash Flow

During the first quarter of fiscal 2017, Qualcomm generated $1.4 billion of cash from operating activities versus $2.7 billion in the prior-year quarter.

Liquidity

At the end of first-quarter fiscal 2017, Qualcomm had $29.8 billion of cash, cash equivalents and marketable securities compared with $30.6 billion a year ago and $32.4 billion at the end of the fourth quarter of fiscal 2016. Total outstanding debt was $9,935 million at the end of first-quarter fiscal 2017 compared with $10,008 million at the end of fourth-quarter fiscal 2016.

Second-Quarter Fiscal 2017 Outlook

Second-quarter fiscal 2017 revenues are estimated in the range of $5.5–$6.3 billion. GAAP earnings per share are projected between $0.89 and $0.99. Non-GAAP earnings per share are estimated between $1.15 and $1.25. Qualcomm is expected to ship 165–185 million MSM chipsets in the ongoing quarter.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

QUALCOMM Incorporated Price and Consensus

 

QUALCOMM Incorporated Price and Consensus | QUALCOMM Incorporated Quote

VGM Scores

At this time, QUALCOMM's stock has a great score of 'A' on growth and momentum front.  The stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.

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

The company's stock is more suitable for growth and momentum than value based on our styles scores.

Outlook

Notably, the stock has a Zacks Rank #4 (Sell). We are expecting below average return from the stock in the next few months.




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