We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Qualcomm (QCOM) Down 6.3% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Qualcomm (QCOM - Free Report) . Shares have lost about 6.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Qualcomm due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Qualcomm Q2 Earnings & Revenues Top Estimates, Up Y/Y
Qualcomm reported solid second-quarter fiscal 2021 results, wherein both the bottom line and the top line beat the respective Zacks Consensus Estimate.
Despite a challenging environment, the results reflect the importance of the company’s technologies, not only to the mobile industry but across several others.
Net Income
On a GAAP basis, net income in the March quarter was $1,762 million or $1.53 per share compared with $468 million or 41 cents per share in the prior-year quarter. The growth primarily resulted from higher operating income.
Non-GAAP net income came in at $2,185 million or $1.90 per share compared with $1,015 million or 88 cents per share in the year-ago quarter. This reflects higher licensing revenues and solid performance in the chipset business. Also, the bottom line beat the Zacks Consensus Estimate by 23 cents, delivering a surprise of 13.8%.
Revenues
Quarterly total GAAP revenues grew to $7,935 million from $5,216 million reported in the prior-year quarter. The growth was driven by strength across Qualcomm CDMA Technologies (QCT) and Qualcomm Technology Licensing (QTL). The company benefited from robust demand for smartphones globally and its ability to increase the scale of non-handset revenues.
Non-GAAP revenues were $7,925 million compared with $5,206 million in the year-ago quarter. Also, the top line surpassed the consensus estimate of $7,626 million.
Segment Results
Revenues in QCT increased 53.2% year over year to $6,281 million. The company delivered on its commitment to increase operating leverage. The growth was driven by strength in handsets and higher demand in adjacent platforms beyond mobile (RF front-end, automotive and IoT). EBT margin increased to 25% from 16%, thanks to favorable product mix and gross margins.
QTL revenues totaled $1,614 million, up 50.6%. The performance was primarily driven by stronger handset shipments, especially in China. EBT margin was 74% compared with 63% in the year-ago quarter.
Other Details
Total expenses increased to $5,769 million from $4,225 million year over year. Operating income came in at $2,166 million, up from $991 million. EBT was $2,129 million compared with $598 million a year ago.
Cash Flow & Liquidity
In the first six months of fiscal 2021, Qualcomm generated $6,086 million of net cash from operating activities compared with $2,201 million in the year-ago period. As of Mar 28, 2021, the company had $6,000 million in cash and cash equivalents with $15,235 million of long-term debt.
Q3 Guidance
For the fiscal third quarter, Qualcomm expects GAAP revenues of $7.1-$7.9 billion. In QCT, the company anticipates revenues between $5.8 billion and $6.3 billion. Revenues in QTL are expected between $1.35 billion and $1.55 billion. While non-GAAP earnings are projected to be $1.55-$1.75 per share, GAAP earnings are likely to be $1.24-$1.44 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Qualcomm has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Qualcomm has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Qualcomm (QCOM) Down 6.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Qualcomm (QCOM - Free Report) . Shares have lost about 6.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Qualcomm due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Qualcomm Q2 Earnings & Revenues Top Estimates, Up Y/Y
Qualcomm reported solid second-quarter fiscal 2021 results, wherein both the bottom line and the top line beat the respective Zacks Consensus Estimate.
Despite a challenging environment, the results reflect the importance of the company’s technologies, not only to the mobile industry but across several others.
Net Income
On a GAAP basis, net income in the March quarter was $1,762 million or $1.53 per share compared with $468 million or 41 cents per share in the prior-year quarter. The growth primarily resulted from higher operating income.
Non-GAAP net income came in at $2,185 million or $1.90 per share compared with $1,015 million or 88 cents per share in the year-ago quarter. This reflects higher licensing revenues and solid performance in the chipset business. Also, the bottom line beat the Zacks Consensus Estimate by 23 cents, delivering a surprise of 13.8%.
Revenues
Quarterly total GAAP revenues grew to $7,935 million from $5,216 million reported in the prior-year quarter. The growth was driven by strength across Qualcomm CDMA Technologies (QCT) and Qualcomm Technology Licensing (QTL). The company benefited from robust demand for smartphones globally and its ability to increase the scale of non-handset revenues.
Non-GAAP revenues were $7,925 million compared with $5,206 million in the year-ago quarter. Also, the top line surpassed the consensus estimate of $7,626 million.
Segment Results
Revenues in QCT increased 53.2% year over year to $6,281 million. The company delivered on its commitment to increase operating leverage. The growth was driven by strength in handsets and higher demand in adjacent platforms beyond mobile (RF front-end, automotive and IoT). EBT margin increased to 25% from 16%, thanks to favorable product mix and gross margins.
QTL revenues totaled $1,614 million, up 50.6%. The performance was primarily driven by stronger handset shipments, especially in China. EBT margin was 74% compared with 63% in the year-ago quarter.
Other Details
Total expenses increased to $5,769 million from $4,225 million year over year. Operating income came in at $2,166 million, up from $991 million. EBT was $2,129 million compared with $598 million a year ago.
Cash Flow & Liquidity
In the first six months of fiscal 2021, Qualcomm generated $6,086 million of net cash from operating activities compared with $2,201 million in the year-ago period. As of Mar 28, 2021, the company had $6,000 million in cash and cash equivalents with $15,235 million of long-term debt.
Q3 Guidance
For the fiscal third quarter, Qualcomm expects GAAP revenues of $7.1-$7.9 billion. In QCT, the company anticipates revenues between $5.8 billion and $6.3 billion. Revenues in QTL are expected between $1.35 billion and $1.55 billion. While non-GAAP earnings are projected to be $1.55-$1.75 per share, GAAP earnings are likely to be $1.24-$1.44 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Qualcomm has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Qualcomm has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.