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QUALCOMM Incorporated (QCOM) designs, develops, manufactures, and markets digital telecommunications products and services. It operates in four segments: Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL), Qualcomm Wireless and Internet (QWI), and Qualcomm Strategic Initiatives (QSI).

It is scheduled to report its Q3 2012 results on July 18, 2012, after the bell. In this article I will recap the historical results of the company, latest EPS estimates vs. surprises, latest developments and closest competitors' development.

Technical Overview


The stock has a market capitalization of $94.58B and is currently trading at $55.17 with a 52 week range of $45.98 - $68.87. The stock performance year to date: 1.64%. It is currently trading below 20, 50 and 200 SMA.

Key Metrics

  • Trailing P/E: 16.63
  • Forward P/E: 13.33
  • Price/Sales: 5.45
  • Price/Book: 2.96
  • PEG Ratio: 1.31
  • Total Debt: 1.18B
  • Annual dividend yield: 1.60%
  • Return on Equity: 17.16%
  • Return on Assets: 9.32%

QUALCOMM Incorporated Revenue and Net Income History

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter it reported $1.01 EPS, beating analyst estimates of $0.96.

QUALCOMM Incorporated EPS Historical Results vs Estimates

The consensus EPS estimate is $0.86 based on 34 analysts' estimates, up from $0.73 a year ago. Revenue estimates are $4.68B, up from $3.62B a year ago. The median target price by analysts for the stock is $72.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On June 27, 2012, Cantor Fitzgerald initiated Buy rating for the company.
  • On May 23, 2012, Oppenheimer reiterated Outperform rating for the company.
  • On April 19, 2012, FBR Capital reiterated Outperform rating for the company.
  • On April 10, 2012, Oppenheimer reiterated Outperform rating for the company.
  • On April 5, 2012, Barclays reiterated Overweight rating for the company.
  • On April 2, 2012, Canaccord Genuity reiterated Buy rating for the company.
  • On March 28, 2012, Deutsche Bank reiterated Buy rating for the company.
  • On March 11, 2012, Avian initiated Positive rating for the company.
  • On February 2, 2012, UBS reiterated Buy rating for the company.
  • On February 2, 2012, Oppenheimer reiterated Outperform rating for the company.
  • On February 2, 2012, Barclays Capital reiterated Overweight rating for the company.

Latest Developments

  • On June 27, 2012, QUALCOMM Inc. and Akamai Technologies, Inc. announced that the two companies are collaborating on the implementation of new protocol enhancements for mobile devices.
  • On June 18, 2012, QUALCOMM Inc. announced that it has acquired Summit Microelectronics (Summit), a developer and provider of programmable power integrated circuits based in Sunnyvale, CA. All employees of Summit Microelectronics have joined Qualcomm's CDMA Technologies division.
  • On May 24, 2012, Reuters reported that Bharti Airtel Limited agreed to buy a 49% stake in Qualcomm Inc's (QCOM.O) fourth-generation (4G) broadband venture in the country for $165 million.
  • On May 16, 2012, Reuters reported that Bharti Airtel Limited is in advanced talks to buyout the Indian partners of QUALCOMM Inc. in a fourth-generation (4G) broadband venture in the country.
  • On April 23, 2012, Imagination Technologies Group plc announced that it has signed a license agreement with Qualcomm Incorporated, for certain IP from Imagination's Ensigma UCC broadcast, communications and connectivity IP family.
  • On April 18, 2012, QUALCOMM Inc. announced that for the third quarter of 2012, it expects revenues of $4.45-$4.85 billion, non-GAAP diluted earnings per share (EPS) to be $0.83-$0.89 and GAAP EPS to be $0.67-$0.73. For fiscal 2012, it expects revenues of $18.7-$19.7 billion, non-GAAP diluted earnings per share to be $3.61-$3.76 and GAAP EPS to be $3.41-$3.56. According to I/B/E/S Estimates, analysts are expecting the Company to report revenue of $4.80 billion, EPS of $0.90 for third quarter of 2012; revenue of $19.4 billion and EPS of $3.77 for fiscal 2012.
  • On April 3, 2012, QUALCOMM Inc. announced a quarterly cash dividend of $0.25 per common share, payable on June 20, 2012, to stockholders of record at the close of business on June 1, 2012.
  • On March 6, 2012, QUALCOMM Inc. announced that its Board of Directors has approved a 16% increase in the Company's quarterly cash dividend and, effective immediately, a new $4.0 billion stock repurchase program to replace the prior $3.0 billion stock repurchase program, which had $948 million of repurchase authority remaining, net of put options outstanding.
  • On February 27, 2012, Reuters reported that Qualcomm Inc, Telefonica SA (TEF) and Mozilla Foundation have established an alliance to initiate competition in the smartphone software market, through the design and creation of a new Internet-based free technology for cheaper smartphones.
  • On February 23, 2012, Qualcomm Life Inc., a wholly owned subsidiary of Qualcomm Inc, and Orange Business Services of France Telecom SA, through its International M2M Center located in Brussels, announced a collaboration in which Qualcomm Life will use Orange Business Services' M2M connectivity services in Europe for its 2net Platform to seamlessly connect health care providers and patients and enable secure remote monitoring for various chronic diseases.
  • On February 15, 2012, iSonea Limited announced that it will design and market a home and mobile asthma monitoring platform with telecommunications corporation Qualcomm Life Inc., a wholly owned subsidiary of Qualcomm Inc .
  • On February 1, 2012, QUALCOMM Inc. announced that for the second quarter of 2012, it expects revenues of $4.6 - $5.0 billion, non-GAAP diluted earnings per share to be $0.91 - $0.97 and GAAP EPS to be $1.20 - $1.26. According to I/B/E/S Estimates, analysts are expecting the Company to report EPS of $0.88 on revenue of $4.5 billion for the second quarter of 2012.

Competitors

QUALCOMM Incorporated operates in Communication Equipment industry. The company could be compared to Broadcom Corp. (BRCM), EZchip Semiconductor Ltd. (EZCH), Nokia Corporation (NOK), Spreadtrum Communications Inc. (SPRD), and Texas Instruments Inc. (TXN). Below is the table comparison of the most important ratios between these companies and the industry.

QUALCOMM Incorporated key ratio comparison with direct competitors

Below is the chart comparison with the stock price changes as a percentage for the selected companies for the last one year period.

QCOM Chart
(Click to enlarge)

QCOM data by YCharts

Competitors' Latest Development

  • On July 9, 2012, Genius Brands International, Inc announced that in partnership with Nokia Corporation it will bring exclusive mobile apps that run on Microsoft Corp.'s (MSFT) Windows Phone platform to the Nokia Lumia range of devices including the Lumia 900 on AT&T.
  • On July 5, 2012, Nokia Oyj announced that NAMCO BANDAI Holdings Inc.'s (OTC:NCBDF) NAMCO BANDAI Games America Inc and NAMCO BANDAI Games Inc are to support the recently launched Asha Touch devices, having more than 20 arcade titles available to be downloaded through Nokia Store.
  • On July 3, 2012, Dow Jones reported that State-run Indian telecom operator Bharat Sanchar Nigam Ltd. (BSNL) has given network-equipment contracts to China's ZTE Corp (OTCPK:ZTCOF) and Alcatel Lucent SA (ALU). While ZTE was the lowest bidder, Alcatel-Lucent was among four vendors shortlisted by BSNL.
  • On June 29, 2012, The Economic Times reported that Nokia Siemens Networks has bagged nearly INR200 crore (INR2 billion) of contracts to supply network gear to the Railways.
  • On June 26, 2012, Nokia Oyj announced that Ford's research organization will use the Nokia Location Platform to advance innovation for smart and connected vehicles, as demonstrated by the Ford EVOS concept car. Ford selected the Nokia Location Platform to leverage Nokia's global location content, including the NAVTEQ Map, as well as scalable cloud services and APIs.
  • On June 20, 2012, Nokia Oyj announced new partnership with Zynga Inc (ZNGA) to bring Zynga's games to Nokia Lumia smartphones and Windows Phones during autumn 2012, including Word with Friends and Draw Something.
  • On June 19, 2012, Dow Jones reported that four telecommunication gear makers short-listed by Bharat Sanchar Nigam Ltd. for an equipment supply contract worth more than $1 billion have pulled out saying the final bid price is very low and isn't viable for them.
  • On June 15, 2012, Moody's announced that it has lowered Nokia Oyj's credit rating to Ba1 from Baa3. The outlook is negative. The short term rating is lowered to Not-Prime from Prime-3 with negative outlook.
  • On June 15, 2012, Dow Jones reported that Nokia Oyj's small R&D facility in Burnaby, B.C., is caught up in a global restructuring of the Espoo, will see 10,000 layoffs across the Company.
  • On June 14, 2012, Reuters reported that Nokia Oyj plans to cut 10,000 jobs globally while it warned the 2012 second-quarter loss from its cellphone business would be larger than expected.
  • On June 14, 2012, Dow Jones reported that Nokia Oyj is selling its Vertu luxury handset business to private equity firm EQT, in a bid to raise cash. The sale is expected to close in the second half of 2012, follows an ongoing strategic review of non-core assets that could include further divestments of other assets.
  • On June 14, 2012, Reuters reported that Nokia Oyj plans to cut another 10,000 jobs globally and warned the second-quarter loss from its cellphone business would be larger than expected.
  • On June 14, 2012, Reuters reported that Nokia Oyj's shares fell by 9% after it has unveiled job cuts and additional restructuring activities.
  • On June 14, 2012, Nokia Oyj announced plans to acquire imaging specialists as well as all technologies and intellectual property from Scalado AB. The transaction is expected to close during the third quarter of 2012.
  • On June 11, 2012, Reuters reported that Samsung Electronics Co Ltd denied, it was interested in acquiring Nokia Oyj.
  • On June 11, 2012, Texas Instruments Incorporated announced that for the second quarter of 2012, it currently expects revenue to be in the range of $3.28-3.42 billion compared with the prior range of $3.22-3.48 billion and EPS to be in the range of $0.32-0.36 compared with the prior range of $0.30-0.38.
  • On June 7, 2012, Nokia Oyj announced that Woodcraft Rangers, a Los Angeles-based non-profit providing education and enrichment to more than 16,500 youth from in-need neighborhoods through after school programs, has chosen the company's Lumia 900 to support its field operations.
  • On June 7, 2012, Nokia Oyj announced that Nokia Oyj and Siemens AG's joint venture Nokia Siemens has been chosen by the Saudi Arabian operator Zain KSA to supply infrastructure and services to the company's 4G network in Saudi Arabian city, Jeddah.
  • On June 6, 2012, Reuters reported that Nokia Oyj has introduced three models of Asha phones with large touchscreens, filling the gap in its product range. The product Asha 305 will be available on sale for the price of EUR 63, excluding subsidies and taxes.
  • On June 1, 2012, Google Inc. (GOOG) announced that it has filed a complaint with the European Commission against Nokia Oyj and Microsoft Corp. Google has accused Nokia Oyj and Microsoft Corp of colluding against rivals in the use of their smartphone patents.
  • On June 1, 2012, Reuters reported that in connection with Google Inc.'s complaint with the European Commission against Nokia Oyj and Microsoft Corp, suggesting that the companies are colluding on intellectual property rights, Nokia Oyj has said that the claim was wrong and countered that devices using Google Inc.'s Android software had problems with patents.
  • On June 1, 2012, Dow Jones reported that DragonWave Inc has completed the acquisition of Nokia Oyj and Siemens AG's joint venture Nokia Siemens Networks' microwave transport business including its associated operational support system (OSS) and related support functions.
  • On May 3, 2012, Spreadtrum Communications, Inc. announced that for the second quarter of 2012, it expects revenue to be in the range of USD170 million to USD175 million.
  • On April 23, 2012, Texas Instruments Incorporated announced that for the second quarter of 2012, it expects revenue to be in the range of $3.22-$3.48 billion and Earnings per share to be in the range of $0.30-$0.38. The second quarter's results will be negatively affected by about $100 million of acquisition charges and about $10 million of restructuring charges.
  • On April 14, 2012, Texas Instruments Incorporated announced that it will become a component of the NASDAQ-100 Index and the NASDAQ-100 Equal Weighted Index prior to market open on April 23, 2012.
  • On March 14, 2012, Spreadtrum Communications, Inc. and Micromax Informatics Limited announced a partnership to work together to grow the market for innovative, value for money handset products in India and other emerging markets.
  • On March 12, 2012, Texas Instruments Incorporated and iRobot Corp announced a partnership to develop robotic technologies using TI's smart multicore OMAP platform. The two companies will achieve this vision by leveraging iRobot's long history in advancing the field of robotics and TI's strength in applications processors and related technologies.
  • On March 8, 2012, Texas Instruments Incorporated announced that for the first quarter of 2012, it lowered its expected ranges for revenue and earnings per share . The reductions are due to lower demand for Wireless products.
  • On February 27, 2012, Spreadtrum Communications, Inc. and Allyes, a comprehensive solution provider of digital interactive marketing in China, have established a partnership to deliver a rich advertising ecosystem to developers deploying applications on Spreadtrum's mobile platforms.
  • On January 23, 2012, Texas Instruments Incorporated announced that for the first quarter of fiscal 2012, it expects revenue to be between $3.02-$3.28 billion and earnings per share of $0.16-$0.24. According to I/B/E/S Estimates, analysts are expecting the Company to report revenues of $3.23 billion for the first quarter of 2012.
  • On January 19, 2012, Texas Instruments Incorporated announced that the Board of Directors has declared a quarterly cash dividend of $0.17 per share of common stock, payable February 13, 2012, to stockholders of record on January 31, 2012.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Source: Earnings Preview: Qualcomm Incorporated