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Tickers in this Article: QCOM
Qualcomm (Nasdaq:QCOM) is scheduled to announce its fourth quarter earnings on Wednesday, November 7, 2012.

Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Surprising Earnings Results

What to Expect: Analysts are expecting Qualcomm to report earnings of 70 cents per share, up 2.9% from a year ago, when the company reported earnings of 68 cents per share.

While the consensus estimate is the same as it was three months ago, it is down from 71 cents a month ago. Analysts are projecting earnings of $3.19 per share for the fiscal year.

Qualcomm is expected to report revenue of $4.67 billion for the quarter, beating last year's figure of $4.12 billion by 13.4%. For the fiscal year, expected revenue is $18.91 billion.

Company Performance: Year-over-year revenue increases have been in the double digits for the past four quarters. On average, the figure has risen by 33.6%. The biggest change came in the first quarter when revenue rose 39.8%.

QCOM has a P/E ratio of 17.2. The P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Profit With The Power Of Price-To-Earnings

Over the past quarter, the stock price has fallen slightly to $59.73, from $60.13 on August 6, 2012. October 4, 2012 to October 12, 2012 marked one of Qualcomm's worst periods, as the share price fell $3.76.

The Competition: Qualcomm designs and manufactures digital wireless telecommunications products and services based on its CDMA technology and other technologies. Analysts are optimistic about Qualcomm, with 33 of 35 assigning it a buy rating. They are slightly more optimistic about the stock recently, as the number of buy ratings has risen slightly over the past three months.

The company's closest competitor in the communications equipment industry is Telefonaktiebolaget LM (ERIC). Analysts are more optimistic about Qualcomm than about Telefonaktiebolaget LM. Only three out of 13 analysts rate the latter a buy.

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