Earnings Preview: Qualcomm

Jul.18.12 | About: Qualcomm Inc. (QCOM)

Qualcomm (NASDAQ:QCOM) is expected to report Q3 earnings after the market close on Wednesday, July 18, with a conference call scheduled for 4:45 pm ET.

Guidance

The consensus estimate is 86c for EPS and $4.68B for revenue, according to First Call. This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Qualcomm's guidance was for EPS of 83c-90c on $4.45-$4.85B in revenue.

Analyst Views

ThinkEquity expects Qualcomm to beat for the June quarter and remains comfortable with its 88c/$4.75B estimates. ThinkEquity's forecast assumes QTL royalty sales of $1.5B based on a royalty base of $45.9B, or down 11% quarter-over-quarter, driven by March industry sell-in of 221M units at a $208 ASP, QCT sales of $3.0B driven by 148M chip units at ~$20 ASP and 19% QCT EBIT margins which the firm views as depressed on Qualcomm's increased 28nm spend. The iPhone 5, 28nm loosening and Windows 8 should be positive multi-quarter catalysts for December and beyond.