A month has gone by since the last earnings report for Qualcomm (QCOM Quick QuoteQCOM - Free Report) . Shares have added about 3.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Qualcomm due for a pullback? 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 drivers.

Qualcomm Tops Q3 Earnings Estimates on Solid Revenues

Qualcomm reported strong third-quarter fiscal 2024 results, with the bottom and top lines beating the respective Zacks Consensus Estimate, driven by healthy demand trends in Android handsets and automotive businesses. Both metrics improved year over year, led by the strength of the business model, revenue diversification and the ability to respond proactively to the evolving market scenario. 

Management expects a steady improvement in the demand trajectory in the remainder of fiscal 2024 and remains confident of delivering non-GAAP earnings per share growth of about 20% year over year.

Net Income

On a GAAP basis, net income in the June quarter improved to $2.13 billion or $1.88 per share from $1.8 billion or $1.60 per share in the prior-year quarter. The increase in GAAP earnings was primarily attributable to top-line growth. 

Quarterly non-GAAP net income came in at $2.65 billion or $2.33 per share compared with $2.1 billion or $1.87 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 8 cents.

Revenues

On a GAAP basis, total revenues in the fiscal third quarter were $9.39 billion compared with $8.45 billion in the year-ago quarter. The quarterly revenues beat the consensus mark of $9.23 billion. Despite soft industrial IoT demand patterns, Qualcomm registered record automotive revenues for the fourth consecutive quarter owing to solid momentum from the Snapdragon Digital Chassis platform. Strength within the handset business also buoyed the top line.

Segment Results

Quarterly revenues from Qualcomm CDMA Technologies (QCT) were $8.07 billion, up from $7.17 billion, as strength in the automotive platform and higher demand in handsets was partially offset by channel inventory drawdown within the IoT business. The company witnessed solid market traction in the EDGE networking business that helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets. 

Automotive revenues rose 87% to a record high of $811 million, driven by increased content in new vehicle launches with its Snapdragon Digital Chassis platform. This was the 15th consecutive quarter in which Qualcomm recorded double-digit growth in automotive revenues. The company expects automotive revenues to increase to more than $4 billion in fiscal 2026. Handset revenues were up 12% to $5.9 billion, primarily led by healthy traction in premium Android handsets and solid revenues from China-based OEMs. However, IoT revenues were down 8% to $1.4 billion due to the channel inventory drawdown. EBT margin for the QCT segment rose to 27% from 24%.

Qualcomm Technology Licensing (QTL) revenues totaled $1.27 billion, up 3% year over year, owing to strength in handset and automotive businesses. EBT margin improved to 70% from 66%.

Cash Flow & Liquidity

Qualcomm generated $9.56 billion of net cash from operating activities in the first nine months of fiscal 2024 compared with $7.21 billion a year ago. At quarter-end, the company had $7.77 billion in cash and cash equivalents and $13.19 billion of long-term debt. The company repurchased 7 million shares for $1.3 billion during the quarter.

Q4 Guidance

For the fourth quarter of fiscal 2024, Qualcomm expects GAAP revenues of $9.5-$10.3 billion due to market stabilization, recovery in market demand and portfolio strength. Non-GAAP earnings are projected to be $2.45-$2.65 per share, while GAAP earnings are likely to be $2.38-$2.58 per share. Revenues from QTL are expected to be between $1.35 billion and $1.55 billion. For QCT, the company anticipates revenues between $8.1 billion and $8.7 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

Currently, Qualcomm has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been 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.

Performance of an Industry Player

Qualcomm is part of the Zacks Wireless Equipment industry. Over the past month, Juniper Networks (JNPR Quick QuoteJNPR - Free Report) , a stock from the same industry, has gained 3%. The company reported its results for the quarter ended June 2024 more than a month ago.

Juniper reported revenues of $1.19 billion in the last reported quarter, representing a year-over-year change of -16.8%. EPS of $0.31 for the same period compares with $0.58 a year ago.

For the current quarter, Juniper is expected to post earnings of $0.51 per share, indicating a change of -15% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Juniper has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.