Earnings Preview: Qualcomm

| About: Qualcomm Inc. (QCOM)

Qualcomm (NASDAQ:QCOM) is expected to report Q1 earnings after the market close on Wednesday, February 1, with a conference call scheduled for 4:45 pm ET.


The consensus estimate is 90c for EPS and $4.58B for revenue, according to First Call. Guidance for Q2 will be watched closely, given that results for the December quarter are largely priced into the shares. On Nov. 11, management reaffirmed prior Q1/FY12 guidance. Guidance for Q1: EPS 86c-92c on $4.35B-$4.75B in revenue. For FY12: EPS $3.42-$3.62, on $18B-$19B in revenue. FY12 non-GAAP R&D & SG&A expenses were guided to be up 15% sequentially. CLSA expects slight upside to Qualcomm's Q1 and outlook. The firm believes chipset strength at Apple (NASDAQ:AAPL) more than offset weaker trends at Research in Motion (RIMM) and HTC -- both are Snapdragon customers -- as well as slower Windows phone sell-through at Nokia (NYSE:NOK).

Looking into the next few quarters, Qualcomm should benefit from accelerating LTE adoption in the U.S., strong smartphone growth in China, and potential gains in WiFi. Consensus for Q2: 89c on $4.51B in revenue. Consensus for FY12: $3.59 on $18.48B in revenue. Most of the analysts on the Street prefer to remain on the sidelines as they contend that most of the positives on Qualcomm's stock have already been reflected in the current valuation -- thus leaving little scope for an upside.