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QUALCOMM's Third Quarter Earnings Report
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QUALCOMM Incorporated (Nasdaq:QCOM) announced its results for the third quarter on July 18, 2012. Qualcomm designs and manufactures digital wireless telecommunications products and services based on its CDMA technology and other technologies.
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: Can Earnings Guidance Accurately Predict The Future?
The Numbers: Both EPS and revenues failed to meet expectations as QUALCOMM posted 69 cents per share and revenues of $4.63 billion. Analysts were expecting 77 cents per share and revenues of $4.68 billion. EPS rose 13.1% while revenue climbed 27.7% from the same period last year. QUALCOMM has averaged revenue growth of 33.7% over the past five quarters. The company's net income for the quarter rose 16.6% to $1.21 billion. Last quarter marked the third in a row of rising net income.
Management Quote: "Adoption of 3G and 3G/4G technologies continues around the world, driving strong year-over-year growth in our chipset and licensing businesses this quarter," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "Looking forward, our growth estimates for 3G/4G device shipments in calendar 2012 have moderated slightly, and we now expect the demand profile of the calendar year to be more back-end loaded as new devices are launched for the holiday season. Although our outlook for semiconductor volumes in the fiscal fourth quarter has been reduced from our prior expectations, we are ramping supply of our 28 nanometer chipsets to help enable what we expect to be a strong December quarter for our semiconductor business."
A Look Back: Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 1.9 percentage points to 62.8% from the year-earlier quarter. Over that time, margins have contracted on average 2.2 percentage points per quarter on a year-over-year basis.
Net income has increased 43.3% year-over-year on average across the last five quarters. The biggest gain came in the second, when income climbed more than twofold from the year-earlier quarter.
Looking Ahead: Over the past 90 days, the average estimate for the fourth quarter has fallen from 90 cents per share to 79 cents, indicating that analysts are growing pessisimistic about the company's performance next quarter. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. The average estimate for the fiscal year is now $3.30 per share, down from $3.33 60 days ago.
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: Can Earnings Guidance Accurately Predict The Future?
The Numbers: Both EPS and revenues failed to meet expectations as QUALCOMM posted 69 cents per share and revenues of $4.63 billion. Analysts were expecting 77 cents per share and revenues of $4.68 billion. EPS rose 13.1% while revenue climbed 27.7% from the same period last year. QUALCOMM has averaged revenue growth of 33.7% over the past five quarters. The company's net income for the quarter rose 16.6% to $1.21 billion. Last quarter marked the third in a row of rising net income.
Management Quote: "Adoption of 3G and 3G/4G technologies continues around the world, driving strong year-over-year growth in our chipset and licensing businesses this quarter," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "Looking forward, our growth estimates for 3G/4G device shipments in calendar 2012 have moderated slightly, and we now expect the demand profile of the calendar year to be more back-end loaded as new devices are launched for the holiday season. Although our outlook for semiconductor volumes in the fiscal fourth quarter has been reduced from our prior expectations, we are ramping supply of our 28 nanometer chipsets to help enable what we expect to be a strong December quarter for our semiconductor business."
A Look Back: Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 1.9 percentage points to 62.8% from the year-earlier quarter. Over that time, margins have contracted on average 2.2 percentage points per quarter on a year-over-year basis.
Net income has increased 43.3% year-over-year on average across the last five quarters. The biggest gain came in the second, when income climbed more than twofold from the year-earlier quarter.
Looking Ahead: Over the past 90 days, the average estimate for the fourth quarter has fallen from 90 cents per share to 79 cents, indicating that analysts are growing pessisimistic about the company's performance next quarter. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. The average estimate for the fiscal year is now $3.30 per share, down from $3.33 60 days ago.
by
Investopedia Staff
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