Seeking Alpha
Profile| Send Message|
( followers)  

Qualcomm (NASDAQ:QCOM) is expected to report Q3 earnings after market close Wednesday July 23, with a conference call scheduled for 4:00 pm ET.

Guidance

The consensus estimate is 55c for EPS and $2.71B for revenue, according to First Call. The company updated and raised its guidance in June, citing higher ASP's contributing to QTL performance. The updated guidance indicated revenue should be slightly above the high-end of the company's earlier guidance of $2.5B to $2.7B; EPS should be 54c to 55c, MSM units should be about 86M, and royalty units should be about 107M.

Analyst Views

Citigroup expects Qualcomm to report an in-line Q3, and reminded investors that Qualcomm has a typical pattern of upside earnings surprise. The company has provided upside earnings surprise in seven of the past eight quarter times, beating revenues by 1.3% on average, and EPS by 2.5%. Nonetheless, Citigroup says that mixed handset fundamentals remain a concern and bring risk to estimates. Although certain high-end phones are selling well (Apple, RIM), Citigroup cannot ignore comments from Sony Ericsson and Nokia (NYSE:NOK) that the high-end phone market is weak. There have been some concerns recently that the company trimmed its wafer starts at one of its foundries and that this may lead to weak September quarter guidance. It may also simply be a reaction to its own bloated inventory level.

Looking ahead, Cowen expects guidance for the September quarter will follow the company's traditional course of "conservative" and do not expect large changes to consensus after the conference call. However, Cowen still expects the company to at least be able to hit their 56c EPS estimate for September.

Source: Earnings Preview: Qualcomm