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Qualcomm Inc. (QCOM)

  • Thu, Jan. 29, 12:47 PM
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  • Thu, Jan. 29, 9:12 AM
  • Wed, Jan. 28, 6:15 PM
    • Qualcomm (NASDAQ:QCOM) partly blames its soft FY15 (ends Sep. '15) guidance on "a shift in share among OEMs at the premium tier, which has reduced our near-term opportunity for sales of our integrated Snapdragon" processors." That's undoubtedly a reference to Apple, which (though using Qualcomm's 4G baseband modems and other ICs) relies on its home-grown A-series app processors, and just reported huge FQ1 iPhone sales.
    • The mobile chip/IP giant also cites "heightened competition in China," where its issues are well-known and MediaTek/Intel have been hungry to gain share, and "expectations that our Snapdragon 810 processor will not be in the upcoming design cycle of a large customer's flagship device." Bloomberg has reported Samsung won't use the 810 in its Galaxy S6 (ostensibly due to overheating issues), instead relying on its own (Exynos) processors.
    • In addition to a Snapdragon processor (the 805), Qualcomm supplies a 4G baseband modem and several other ICs for many Galaxy S5 models. It's unknown if Samsung, which has developed an app processor with an integrated 4G baseband, will be using similar Qualcomm parts in the S6.
    • On the bright side, Qualcomm says it has resolved a dispute with a Chinese licensee. But it still believes other Chinese licensees aren't fully complying with their obligations.
    • QCT (chip division) sales rose 14% Y/Y in FQ1 to $5.2B, and division op. profit rose 26% to $1.15B. With China taking a toll, QTL (licensing division) revenue fell 4% to $1.82B, and op. profit 5% to $1.58B.
    • $1.7B was spent on buybacks. Qualcomm ended FQ1 with $31.6B in cash/marketable securities (equal to 29% of its current market cap), and no debt. Shares are down to $65.32 AH.
    • FQ1 results, PR
  • Wed, Jan. 28, 5:35 PM
  • Nov. 6, 2014, 3:24 PM
    • Qualcomm (QCOM -9.3%) has received one downgrade (from Atlantic Equities) and a slew of target cuts after missing FQ4 estimates, issuing light FQ1/FY15 guidance, and disclosing U.S. and EU regulators have joined their Chinese counterparts in launching probes.
    • Regarding the FTC, Qualcomm says the agency is probing whether licensing policies violate FRAND terms, and that it could issue a fine or (notably) order policy changes. Qualcomm collects a ~3.25% royalty on 4G-only devices, and often gets a 4%-5% royalty on devices with 3G radios (e.g. most phones sold today).
    • Not surprisingly (given its July remarks about Chinese non-payment), IP licensing weakness was responsible for Qualcomm's FQ4 miss. The licensing division (still responsible for over half of op. profit) saw revenue fall 4% Y/Y to $1.8B, and op. profit drop 5% to $1.6B. By contrast, the chip division's revenue rose 9% to $4.8B, and (thanks in part to cost cuts) its op. profit rose 49% to $1.05B.
    • With China still a question mark, Qualcomm has set a conservative FY15 (ends Sep. '15) forecast for reported royalty-bearing device sales of $240B-$270B (-1% to +11% Y/Y). FQ1 reported device sales are expected to be down 4%-14% Y/Y.
    • "[Chinese] royalty discounts are not a question of if, but only a question of when and how much," thinks BofA/Merrill (Neutral) after meeting with local firms and regulators. Rosenblatt Securities offers a similar take.
    • Canaccord (Buy), however, thinks a poor Chinese outcome is now priced in. "With Qualcomm trading ... at 14x or 10x ex-cash our updated F2015 pro forma EPS estimate that excludes 266M 3G/4G devices from Chinese OEMs in our [licensing division] revenue estimate, we believe the valuation is compelling."
    • Cowen and RBC thinks Qualcomm might opt to raise debt to fund larger buybacks. $1.2B was spent on buybacks in FQ4, and $4.55B over the whole of FY14.
  • Nov. 6, 2014, 9:14 AM
  • Nov. 5, 2014, 4:07 PM
    • Qualcomm (NASDAQ:QCOM): FQ4 EPS of $1.26 misses by $0.05.
    • Revenue of $6.69B (+3% Y/Y) misses by $330M.
    • Expects FQ1 revenue of $6.6B-$7.2B and EPS of $1.18-$1.30, below a consensus of $7.39B and $1.43.
    • Expects FY15 revenue of $26.8B-$28.8B and EPS of $5.05-$5.35, below a consensus of $28.9B and $5.58.
    • 236M FQ4 MSM chip shipments, in-line with guidance of 230M-245M. 250M-270M shipments expected in FQ1.
    • Shares -3.9% AH.
    • Press Release
  • Oct. 15, 2014, 3:17 AM
    • Qualcomm (NASDAQ:QCOM) has agreed to acquire U.K. chip maker CSR (OTCQB:CSRXF) for £1.56B ($2.5B) in a deal that values the latter's shares at 900 pence each, or a 37% premium to its closing price of 658.5 pence yesterday.
    • Qualcomm CEO Steven Mollenkopf said that CSR's Bluetooth and audio processing technology "will strengthen Qualcomm's position in providing critical solutions that drive the rapid growth of the Internet of Everything, including business areas such as portable audio, automotive and wearable devices."
    • CSR's shares are +33% at 878.08 pence in London. (PR)
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  • Oct. 14, 2014, 2:47 PM
    • Qualcomm (QCOM +2.4%), NXP (NXPI +5.8%), Synaptics (SYNA +3.1%), and Himax (HIMX +3.5%) are among the mobile chipmakers outperforming after Skyworks hiked its calendar Q3 guidance.
    • Like Skyworks, Qualcomm, NXP, and (via the Renesas SP deal) Synaptics are iPhone suppliers. Recent reports have pointed to strong iPhone 6 build activity and Chinese pre-orders.
    • Like many other chipmakers, the group sold off after Microchip (has relatively low mobile exposure, but a diversified customer base otherwise) issued a calendar Q3 warning, and stated it believes an industry correction has begun. Intel reports after the close.
  • Sep. 19, 2014, 9:36 AM
    • iFixit's teardown of the iPhone 6 Plus turned up five Qualcomm (NASDAQ:QCOM) chips, up from the three found in last year's teardown of the 5S and nearly matching the six found in certain Galaxy S5 teardowns.
    • In addition to the expected Cat-4 LTE baseband modem, a Qualcomm power management IC, RF transceiver, receive-only chip (needed to enable LTE carrier aggregation), and envelope-tracking IC (relatively new, improves battery life) were found in the 6 Plus.
    • In-line with rumors and the company's hints, an InvenSense (NYSE:INVN) motion sensor - specifically, a 6-axis gyroscope/accelerometer - was found. That suggests InvenSense has displaced STMicroelectronics (NYSE:STM) as the iPhone's motion sensor supplier.
    • Two Skyworks (NASDAQ:SWKS) power amplifier modules are found, including a low-band LTE part. Avago (NASDAQ:AVGO) has both a high-band amplifier module, and an integrated ultra high-band amplifier/FBAR filter module. TriQuint (NASDAQ:TQNT) can claim a 3G amplifier module, and merger partner RF Micro (NASDAQ:RFMD) an antenna switch module.
    • Broadcom (NASDAQ:BRCM) appears to remain the iPhone's combo chip supplier (courtesy of a module from partner Murata), and also supplies a touch controller IC. Chipworks thinks Broadcom also has the Wi-Fi slot for the Apple Watch.
    • As expected, NXP (NASDAQ:NXPI) is supplying an NFC module and the M8 motion co-processsor, and Cirrus Logic (NASDAQ:CRUS) the audio codec IC. Texas Instruments (NASDAQ:TXN) is providing a touch transmitter IC.
    • Moving in response: INVN +1.9%. AVGO +1.5%. STM -3.9%.
  • Sep. 18, 2014, 1:56 PM
    • Ericsson (ERIC +4.5%) is joining Broadcom and Texas Instruments in exiting an R&D-intensive mobile baseband modem market dominated by Qualcomm (QCOM +0.6%) and MediaTek. The mobile infrastructure giant says it will discontinue baseband development, and direct some of the resources to base station R&D.
    • ~500 workers will be added to Ericsson's mobile radio network teams. With the baseband unit currently having 1,582 workers, that suggests over 1K jobs could be cut. For reference, Ericsson estimates its 2014 baseband R&D spend will be SEK2.6B ($366M).
    • Shares are up strongly on the news. Ericsson's baseband ops (focused on 4G modems) stem from the winding down of its ST-Ericsson JV last year.
    • In addition to MediaTek, Qualcomm still faces baseband competition from Intel, Nvidia, Spreadtrum, Marvell, and (indirectly) Samsung. While MediaTek and Spreadtrum are profitable, Intel's mobile unit (also covers app processors) has been posting big losses, and (though the companies don't break out the numbers) analysts have estimated Nvidia and Marvell's baseband ops are producing little or no profit.
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  • Aug. 14, 2014, 10:11 AM
    • Qualcomm (QCOM +0.3%) has bought 4.15M Globalstar (GSAT +6.4%) shares, the company discloses in a new 13F. Globalstar shares have popped in response.
    • Globalstar was originally formed as a JV between Qualcomm and Loral in 1991. Qualcomm wrote down most of its investment in the satellite network owner a decade later, shortly before Globalstar filed for Chap. 11. Globalstar finished restructuring in 2004.
    • Separately, Qualcomm has denied a Chinese media report claiming it has financial ties with Zhang Xinzhu, an antitrust expert who was just removed from a government advisory post. Qualcomm says it simply paid a consultancy employing Xinzhu to produce an economic analysis for regulators.
    • Qualcomm is dealing with both a Chinese antitrust probe and an SEC bribery probe. The company stated last month it thinks some Chinese licensees are under-reporting their 3G/4G device sales, and that some might be holding off on getting licenses while the antitrust probe continues.
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  • Jul. 24, 2014, 9:18 AM
  • Jul. 23, 2014, 5:29 PM
    • "We ... believe that certain licensees in China currently are not fully complying with their contractual obligations to report their sales of licensed products to us," Qualcomm (NASDAQ:QCOM) states in its FQ3 report.
    • The company thinks device sales are being under-reported, and that some firms might be holding off on getting licenses while the Chinese government continues its antitrust probe (widely seen as an attempt to negotiate lower 4G royalty rates). Qualcomm is also dealing with an SEC probe over alleged Chinese bribery.
    • While Qualcomm now expects 1.3B global 3G/4G device shipments in calendar 2014 - that's up from 1.075B-1.091B in 2013 and at the high end of a prior 1.22B-1.3B guidance range - it expects only 1.04B-1.13B to be reported to the company for royalty payments.
    • FQ3 EPS received a lift from $1.35B in buybacks. Qualcomm plans to spend a minimum of $1B on buybacks in FQ4.
    • A 31% increase in MSM shipments led to a 17% increase in chip division sales to $5B (lower ASPs?). Cost controls helped the division's op. profit rise 51% to $1.12B. FQ4 MSM chip sales are expected to be up 25% at the guidance midpoint.
    • On the other hand, licensing division revenue fell 3% to $1.8B, and segment op. profit fell 5% to $1.55B. With China weighing, Qualcomm expects reported device sales to be down 2%-12% Y/Y in FQ4.
    • FY14 3G/4G device ASP guidance has been tweaked to $222-$228 from $218-$228. That's nearly even with FY13's $223-$229.
    • FQ3 results, PR, slides (.pdf), device forecasts (.pdf)
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  • Jul. 23, 2014, 4:05 PM
    • Qualcomm (NASDAQ:QCOM): FQ3 EPS of $1.44 beats by $0.22.
    • Revenue of $6.81B (+9% Y/Y) beats by $290M.
    • 225M MSM chip shipments, +31% Y/Y and above guidance of 198M-213M.
    • Expects FQ4 revenue of $6.5B-$7.4B and EPS of $1.20-$1.35 vs. a consensus of $7.15B and $1.39. Expects 230M-245M FQ4 MSM chip shipments.
    • Shares -0.7% AH.
    • Press Release
  • Jul. 22, 2014, 2:52 PM
    • Qualcomm's (QCOM +2.4%) chip unit likely exceeded Street expectations in FQ3 on the back of solid 4G chip demand, writes Cowen's Timothy Arcuri ahead of tomorrow's earnings report.
    • Arcuri also believes licensing/royalty revenue will beat estimates thanks to strong shipments of royalty-bearing 3G/4G devices (royalties will be based on FQ2 shipments).
    • Though Qualcomm is facing tougher 4G baseband chip competition this year thanks to new launches from Intel, Broadcom, and Nvidia, the company still accounts for the lion's share of the market, and maintains an edge in areas such as app processor integration, frequency band support, and the integration of LTE-Advanced features.
    • Shares are rallying following Cowen's note and a strong Q2 report from ARM. The CPU core developer collected royalties on 2.7B Q1 chip shipments (+11% Y/Y), and says it expects a 2H royalty pickup as "more chips are sold to OEMs building more advanced devices."
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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.