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Qualcomm Inc. (QCOM)

  • Fri, Jul. 24, 4:07 AM
    • With the possibility of a Qualcomm (NASDAQ:QCOM) split afloat, an interesting piece of analysis has surfaced on Wall Street, pointing towards Intel (NASDAQ:INTC) as the best possible beau if the firm decides to break itself up.
    • "The chip deal to end all chip deals," said Cowen analyst Timothy Arcuri.
    • Other suitors for Qualcomm's chip business, valued at $30B-$40B, could include a consortium backed by the Chinese government and Samsung Electronics (OTC:SSNLF).
    | Fri, Jul. 24, 4:07 AM | 59 Comments
  • Wed, Jul. 22, 4:51 PM
    • Qualcomm's (NASDAQ:QCOM) strategic realignment plan aims to reduce annual spending by $1.4B. In addition to cutting 15% of its workforce, the company plans to lower costs by reducing annual stock compensation grants by $300M.
    • Confirming a recent WSJ report, Qualcomm adds it plans a review of its corporate/financial structure that includes "possible business separation alternatives" - presumably a reference to a potential split of QCT (chips) from QTL (licensing). Further capital returns and "other potential strategic and financial alternatives" will also be weighed. The review is expected to be finished by year's end.
    • As part of a deal with activist Jana Partners, Qualcomm has added two Jana-backed directors, Mark McLaughlin and Tony Vinciquerra, and plans to add another independent director. Donald Cruickshank won't stand for board re-election at the 2016 annual meeting; Raymond Dittamore won't stand at the 2017 meeting.
    • Qualcomm, which has a history of making big investments in non-core ventures (FLO TV, Globalstar, etc.), also says it's "reducing its investments outside of QTL and QCT and will focus these investments around the highest-return opportunities, including data centers, small cells and certain IoE verticals."
    • Guidance: Discussing its light FQ4 guidance (revenue is expected to be down 25%-40% Y/Y), Qualcomm notes chip sales continue to be impacted by "increased concentration in the premium tier" - a reference to iPhone share gains - as well as lower high-end chip sales from "a vertical customer" (presumably Samsung) and lower Chinese sell-through of certain phones containing high-end chips.
    • In addition, royalty revenue continues to be impacted by Chinese under-reporting (in spite of the February settlement). Qualcomm thinks "it will take time" to finish negotiations with certain Chinese OEMs. The company's FY15 (ends in September) forecast for reported 3G/4G device sales has been cut to $253B-$259B from $255B-$275B.
    • MSM shipments: 225M MSM chips were shipped in FQ3, flat Y/Y and towards the high end of a 210M-230M guidance range. However, shipments are expected to fall to 170M-190M (-19%-28% Y/Y) in FQ4.
    • Key numbers: QCT revenue fell 22% Y/Y in FQ3 to $3.85B; op. profit fell 74% to $289M. QTL revenue rose 7% to $1.93B; op. profit rose 7% to $1.65B. $5.4B was spent to buy back 63.7M shares. Qualcomm ended FQ3 with $35.2B in cash/investments, and $10.9B in debt.
    • After initially rising, shares have fallen to $62.75 AH.
    • FQ3 results/FQ4 guidance, PR
    | Wed, Jul. 22, 4:51 PM | 1 Comment
  • Wed, Jul. 22, 4:07 PM
    • Qualcomm (NASDAQ:QCOM): FQ3 EPS of $0.99 beats by $0.04.
    • Revenue of $5.83B (-14.4% Y/Y) misses by $20M.
    • Expects FQ4 revenue of $4.7B-$5.7B and EPS of $0.75-$0.95, below a consensus of $6.13B and $1.08.
    • Cutting 15% of workforce via strategic realignment plan.
    • Shares +1.9% AH.
    • Press Release
    • Update: Qualcomm finished AH trading down 1.3%.
    | Wed, Jul. 22, 4:07 PM | 24 Comments
  • Tue, Jul. 21, 5:35 PM
  • Mon, Jul. 20, 9:50 PM
    • Shortly after The Information reported major layoffs are planned, the WSJ reports Qualcomm (NASDAQ:QCOM) is "expected to conduct a sweeping strategic review that will look at the possibility of a breakup." Board changes are also reportedly being considered.
    • The WSJ adds Qualcomm might announce it's considering a breakup and other options, such as bigger capital returns, when it posts FQ3 results on Wednesday afternoon. It cautions the company's plans are "in flux." Qualcomm has already launched huge buybacks, and even tapped debt markets to help finance them.
    • In April, activist Jana Partners called on Qualcomm to consider spinning off its chip unit (QCT) from its IP licensing unit (QTL). Chairman Paul Jacobs stated in late June the company has no such plans. There's speculation a spun-off QCT would participate more aggressively in the chip industry's M&A wave.
    • Qualcomm finished AH trading up 2.7% to $65.53.
    | Mon, Jul. 20, 9:50 PM | 5 Comments
  • Mon, Jul. 20, 4:53 PM
    • Ahead of Wednesday's FQ3 report, The Information reports Qualcomm (NASDAQ:QCOM) is planning to announce layoffs this week, and that the cuts could impact over 10% of its 30K-strong workforce. For its part, Fudzilla has reported Qualcomm could lay off ~4K workers.
    • The reports come in a fiscal year that has seen Qualcomm's sales pressured by a Chinese antitrust probe (settled in February) and related licensee non-payments, Apple's high-end share gains (affects app processor sales and high-end royalty rates), and Samsung's decision to exclusively use its Exynos 7420 app processor in the Galaxy 6. The FY15 (ends in September) revenue growth consensus is at -2%, and the FY16 consensus at +1.8%.
    • Qualcomm has already carried out smaller layoffs under CFO George S. Davis (took over in 2013). The company's R&D spend only rose 2% Y/Y in FQ2, and its SG&A spend fell 1%.
    | Mon, Jul. 20, 4:53 PM | 11 Comments
  • Thu, Jul. 16, 5:03 AM
    • European Union regulators have launched twin investigations against Qualcomm (NASDAQ:QCOM), the latest crackdown by the EU on a U.S. tech giant.
    • The first investigation will examine whether the company offered discounts to customers on condition they bought chipsets exclusively from Qualcomm.
    • The second will look at whether the firm engaged in predatory pricing tactics by setting prices below their costs to squeeze out competitors.
    | Thu, Jul. 16, 5:03 AM | 4 Comments
  • Tue, Jul. 7, 4:40 PM
    | Tue, Jul. 7, 4:40 PM | Comment!
  • Wed, Jul. 1, 2:19 PM
    • Pac Crest's Andy Hargreaves: "Although we continue to expect iPhone (AAPL +0.6%) sales to decline in the coming refresh cycle, ongoing share gains should prevent the decline from being as severe as we previously expected ... We believe the majority of people earning $15,000 a year or more in the world will own an iPhone exiting F2015." His FY15 (ends Sep. '15) and FY16 iPhone sales estimates have been raised by 7M and 10M to 236M and 218M.
    • At the same time, Hargreaves has cut his FY15 and FY16 Apple Watch sales estimates by 0.5M and 3M to 10.5M and 21M. "Store visits, Google search volume, third-party data and recent supply checks all suggest demand for Apple Watch has fallen sharply from initial levels." He previously noted Apple Watch Google search activity is trailing the iPod's. Research firm Slice has estimated 2.79M U.S. Watch sales as of mid-June.
    • With the iPhone accounting for the lion's share of Apple's gross profit, Hargreaves, who has maintained a Sector Perform rating since last September, has upped his FY15 and FY16 EPS estimates by $0.28 and $0.34 to $9.41 and $9.29. Consensus is at $9.03 and $9.72.
    • Separately, 9to5 Mac has leaked pictures said to depict the iPhone 6S' case and circuit board. The pictures indicate the 6S will use Qualcomm's (QCOM -0.2%) MDM9x35 baseband modem, first announced in late 2013 and found in some Galaxy S5/S6 units. It has twice the peak download speed (300Mbps) of the MDM9x25 modem used in the iPhone 6/6+, and better power consumption. The MDM9x45, which tops out at 450Mbps, was unveiled last November ahead of 2015 commercial availability.
    • In-line with Apple's past "S" model upgrades, the leaked photos suggest the 6S will look similar to the 6 on the outside. Any difference in thickness/width for 4.7" models is reportedly "too minimal to notice."
    • Last week: Piper, Morgan Stanley provide bullish iPhone notes
    | Wed, Jul. 1, 2:19 PM | 55 Comments
  • Tue, Jun. 30, 9:30 AM
    • "We've had that discussion for a long time, many years the board has looked at it but we still think the synergies of having the businesses together outweighs the dissynergies," Qualcomm (QCOM +0.3%) chairman/ex-CEO Paul Jacobs tells Reuters.
    • The remarks come after activist Jana Partners suggested in April it's in favor of Qualcomm spinning off its chip unit (QCT) from its IP licensing unit (QTL), arguing the former is deeply undervalued. Jana qualified its comments by stating it's not insisting on a breakup, and just wants a "transparent review" of the idea.
    • Keeping QCT and QTL under the same roof allows QCT to obtain more favorable chip patent licensing terms, and also allows R&D carried out by QCT to add to QTL's patent portfolio. QCT now accounts for a solid majority of Qualcomm's revenue, but QTL still accounts for a majority of its op. profit.
    • Yesterday: Drexel downgrades Qualcomm, cites growing price pressure
    | Tue, Jun. 30, 9:30 AM | 1 Comment
  • Mon, Jun. 29, 8:23 AM
    • Less than 6 months after downgrading to Hold on Intel-related fears, Drexel Hamilton has downgraded Qualcomm (NASDAQ:QCOM) to Sell, and set a $55 target. This time around, the firm cites growing price competition.
    • Shares have fallen to $63.28 thanks to the downgrade and lower equity futures. They're now down 14% YTD, and trade for just 12.3x an FY16 (ends Sep. '16) EPS consensus of $5.13. The dividend yield is at 3%.
    • Update: More details here. Drexel's Rick Whittington states Apple, Samsung, and Chinese OEMs want price concessions, and that Intel and Samsung are getting "more aggressive" in their efforts to compete.
    | Mon, Jun. 29, 8:23 AM | 4 Comments
  • Wed, Jun. 24, 3:59 AM
    • Qualcomm (NASDAQ:QCOM) has struck a deal to help China's biggest semiconductor foundry upgrade its technology, as it looks to boost its standing in the country following a record $975M antitrust fine.
    • Under terms of the agreement, SMIC (NYSE:SMI) will form a joint venture with Qualcomm, Huawei Technologies and Belgian chip research center Imec to develop advanced 14-nanometer chips.
    • Qualcomm and SMIC collaborated last year on the production of 28-nanometer chips (the smaller the number, the more advanced the chip).
    | Wed, Jun. 24, 3:59 AM | 3 Comments
  • Fri, Jun. 12, 6:51 PM
    • Qualcomm (NASDAQ:QCOM) has unveiled MuLTEfire, a solution for running 4G networks in unlicensed spectrum that's promised to feature "Wi-Fi-like deployment simplicity," while still providing some of the range and mobility benefits associated with mobile networks.
    • The solution is promoted as an alternative to LTE-U (backed by many carriers), which also works in unlicensed spectrum but (unlike MuLTEfire) requires an anchor in licensed spectrum. Since it doesn't need an anchor, MuLTEfire can be adopted by broadband ISPs, enterprises, venue owners, and others lacking licensed spectrum ... provided enough of a hardware and chip ecosystem is built around it.
    • Should a healthy ecosystem form, Qualcomm stands to benefit from MuLTEfire's adoption via chip sales and royalties for related hardware. In February, the company rolled out small cell base station chipsets and a mobile device RF transceiver that support LTE-U.
    | Fri, Jun. 12, 6:51 PM | 12 Comments
  • Thu, Jun. 11, 4:01 AM
    • Qualcomm (NASDAQ:QCOM) has appointed old hand Frank Meng as its chairman for China, a market which accounts for half of the company's overall revenues, and announced the departure of Wang Xiang, president of Qualcomm Greater China.
    • The shakeup comes after a long stretch of turbulence for Qualcomm in the country. Following a 14-month government probe into antitrust practices, the company agreed to pay a fine of $975M, the largest in China's corporate history.
    | Thu, Jun. 11, 4:01 AM | 9 Comments
  • Mon, Jun. 8, 11:43 AM
    • Following an EU decision to allow L-Band (1452MHz.-1492MHz.) spectrum to be used to provide mobile downlink capacity, Qualcomm's (QCOM -1.1%) U.K. subsidiary plans to unload its L-Band assets.
    • Qualcomm acquired 40MHz. of U.K. L-Band spectrum in 2008 for an £8.3M ($12.7M) license fee. It could get a lot more than that in a sale, given current spectrum prices. A 2013 U.K. auction of 250MHz. of spectrum in the 800MHz. and 2.6GHz. bands raised £2.34B ($3.58B).
    | Mon, Jun. 8, 11:43 AM | 1 Comment
  • Fri, May 29, 1:19 PM
    • The planned merger of Broadcom (a major Qualcomm Wi-Fi/Bluetooth chip rival) and Avago (to some extent a Qualcomm rival in the RF chip market) will give phone suppliers more leverage against Qualcomm (QCOM -0.1%), predicts IDC's Mario Morales.
    • For his part, Drexel Hamilton's Richard Whittington thinks the pairing of Avago and Broadcom's server/networking product lines could impact Qualcomm's server CPU ambitions.
    • Of note: Neither Broadcom nor Avago competes in Qualcomm's core mobile baseband/app processor market; Broadcom shuttered its baseband ops last year to investor approval. Broadcom does plan to compete in the ARM server CPU market ... but so do several other firms.
    • Broadcom/Avago has also fueled speculation Qualcomm could respond with an acquisition of its own, and perhaps even try to trump Avago's Broadcom bid. If one was made, Broadcom and Qualcomm's joint Wi-Fi/Bluetooth combo chip share could draw antitrust scrutiny.
    • Shortly before Broadcom/Avago reports broke, Pac Crest speculated Qualcomm could bid for video processor vendor Ambarella. Last year, Qualcomm spent $2.5B to buy Bluetooth/audio chipmaker CSR.
    | Fri, May 29, 1:19 PM | 12 Comments
Company Description
Qualcomm Inc develops digital communication technology called CDMA (Code Division Multiple Access), & owns intellectual property applicable to products that implement any version of CDMA including patents, patent applications & trade secrets.