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Will Soft Licensing Revenues Dent Qualcomm (QCOM) Q2 Earnings?
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Qualcomm Incorporated (QCOM - Free Report) is scheduled to report second-quarter fiscal 2022 results on Apr 27, after the closing bell. In the fiscal second quarter, Qualcomm Technology Licensing (“QTL”) segment is likely to have recorded a year-over-year decline in revenues owing to a challenging macroeconomic environment.
Factors at Play
The QTL segment generates revenues from licenses from various patent rights used in the manufacture and sale of wireless products. It also garners revenues from royalties based on global sales by licensees of products incorporating or using Qualcomm's intellectual property rights from more than 140,000 patents.
Qualcomm boasts more than 150 5G licensing agreements driven by an unrivaled patent portfolio and ecosystem collaborations, facilitating the rapid global adoption of 5G. However, during the fiscal second quarter, Qualcomm is likely to have recorded lower licensing revenues owing to the strained Sino-U.S. bilateral trade relations and prolonged Ukraine-Russia war.
Qualcomm is expected to face soft demand from China as OEMs from the communist nation are pulling back on new 4G device orders and managing their inventory for the transition to 5G. Consequently, Qualcomm expects a significant impact on device shipment as sell-in and sell-through growth rates realign and channel inventory levels are drawn down in China. In support of the U.S. sanctions, Qualcomm has exited Russia and ceased business relationships with local firms.
Overall Expectations
The Zacks Consensus Estimate for revenues from QTL segment is pegged at $1,548 million, indicating a decline from $1,614 million reported in the year-ago quarter. Management expects QCT revenues in the range of $1.45 billion to $1.65 billion. Segment income before taxes is pegged at $1,177 million, implying a marginal decrease from $1,191 million reported in the prior-year quarter.
For the second quarter of fiscal 2022, Qualcomm expects GAAP revenues of $10.2-$11 billion. The Zacks Consensus Estimate for the same is pegged at $10,579 million, indicating growth of 33.3% from the year-ago quarter’s reported figure. Management anticipates non-GAAP earnings of $2.80-$3.00 per share. The consensus mark for earnings is currently pegged at $2.91 per share. Qualcomm recorded non-GAAP earnings of $1.90 per share in the prior-year quarter.
Earnings Whispers
Our proven model predicts an earnings beat for Qualcomm for the fiscal second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.15%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for T-Mobile US, Inc. (TMUS - Free Report) is +23.36% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Apr 27.
The Earnings ESP for Telephone and Data Systems, Inc. (TDS - Free Report) is +34.62% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on May 5.
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Will Soft Licensing Revenues Dent Qualcomm (QCOM) Q2 Earnings?
Qualcomm Incorporated (QCOM - Free Report) is scheduled to report second-quarter fiscal 2022 results on Apr 27, after the closing bell. In the fiscal second quarter, Qualcomm Technology Licensing (“QTL”) segment is likely to have recorded a year-over-year decline in revenues owing to a challenging macroeconomic environment.
Factors at Play
The QTL segment generates revenues from licenses from various patent rights used in the manufacture and sale of wireless products. It also garners revenues from royalties based on global sales by licensees of products incorporating or using Qualcomm's intellectual property rights from more than 140,000 patents.
Qualcomm boasts more than 150 5G licensing agreements driven by an unrivaled patent portfolio and ecosystem collaborations, facilitating the rapid global adoption of 5G. However, during the fiscal second quarter, Qualcomm is likely to have recorded lower licensing revenues owing to the strained Sino-U.S. bilateral trade relations and prolonged Ukraine-Russia war.
Qualcomm is expected to face soft demand from China as OEMs from the communist nation are pulling back on new 4G device orders and managing their inventory for the transition to 5G. Consequently, Qualcomm expects a significant impact on device shipment as sell-in and sell-through growth rates realign and channel inventory levels are drawn down in China. In support of the U.S. sanctions, Qualcomm has exited Russia and ceased business relationships with local firms.
Overall Expectations
The Zacks Consensus Estimate for revenues from QTL segment is pegged at $1,548 million, indicating a decline from $1,614 million reported in the year-ago quarter. Management expects QCT revenues in the range of $1.45 billion to $1.65 billion. Segment income before taxes is pegged at $1,177 million, implying a marginal decrease from $1,191 million reported in the prior-year quarter.
For the second quarter of fiscal 2022, Qualcomm expects GAAP revenues of $10.2-$11 billion. The Zacks Consensus Estimate for the same is pegged at $10,579 million, indicating growth of 33.3% from the year-ago quarter’s reported figure. Management anticipates non-GAAP earnings of $2.80-$3.00 per share. The consensus mark for earnings is currently pegged at $2.91 per share. Qualcomm recorded non-GAAP earnings of $1.90 per share in the prior-year quarter.
Earnings Whispers
Our proven model predicts an earnings beat for Qualcomm for the fiscal second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.15%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
QUALCOMM Incorporated Price and EPS Surprise
QUALCOMM Incorporated price-eps-surprise | QUALCOMM Incorporated Quote
Zacks Rank: Qualcomm has a Zacks Rank #3.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Amazon.com, Inc. (AMZN - Free Report) is set to release quarterly numbers on Apr 28. It has an Earnings ESP of +37.95% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for T-Mobile US, Inc. (TMUS - Free Report) is +23.36% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Apr 27.
The Earnings ESP for Telephone and Data Systems, Inc. (TDS - Free Report) is +34.62% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on May 5.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.