Qualcomm Inc.[NASDAQ: QCOM], today reported their earnings figures for fiscal 3Q 2011(calendar 2Q 2011). Qualcomm reported revenues of $3.62B which represented an increase of 34% from the same quarter a year ago beating expectaions, but down 6% from the previous quarter. They also reported net income of $1.04B which is up 35% from the same period a year ago and up 4% from the previous quarter. This represents that fact that even though Qualcomm is taking in slightly less revenue, they are still eeking out more profitability. This results in an EPS of $0.61 which is up 30% from the same quarter a year ago and up 3% from the previous quarter. This misses the consensus analysts? estimate of GAAP $0.62 EPS which will likely reflect poorly upon investors as they are likely to punish Qualcomm for just barely missing analyst estimates. Yet, the beat non-GAAP estimates of $0.71 EPS with a non-GAAP EPS of $0.73 EPS. Qualcomm still managed to hit within their guidance which was between $0.60 and $0.64 EPS. Not to mention the fact that 2Q 2011 was a record quarter for Qualcomm where they reported $3.88B in revenue and net income of $999M.
When taking the non-GAAP numbers into account there is the exclusion of the costs attributed to the acquisition of Atheros, which then raises Qualcomm?s EPS to $0.73 which is still down sequentially. Furthermore, Qualcomm saw an effective Tax rate of 21% for the quarter. Qualcomm also states that the fact that they received $401M in revenues in the 2Q 2011 which was a result of agreements entered into with two licenses to settle disputes and $120M in impairment charges related to Firethorn. Overall, it is not a very straight forward earnings report comparison.
Qualcomm saw an increase in shipped CDMA MSM chips. They reported 120 Million units, up 17% from the same quarter a year ago and up 2% from the previous quarter. The average selling price of devices utilizing these chips is an estimated $209 to $215 resulting in $36.4B in sales of devices utilizing Qualcomm MSM chips. This comes out to approximately 170-174 Million shipped units.
Qualcomm also issued an increased guidance for 4Q 2011, which also represents an increased guidance for FY 2011. They issued a revenue and profit guidance above what analysts expcted. They expect to see revenue between $3.86 and $4.16B and an EPS of $0.75 to $0.80. This beats the analysts? modeled expectations of $3.9B and $0.76 EPS. For the Fiscal year 2011 Qualcomm also raised their guidance to $14.7 to $15B in revenue and a Non-GAAP EPS of $3.15 to $3.20(GAAP $2.50-$2.55). This is an increase from the previously estimated $14.1 to $14.7 and a non-GAAP EPS of $3.05 to $3.13(GAAP $2.51-2.55). Looking at these numbers we can see that Qualcomm actually lowered their GAAP guidance, but raised their Non-GAAP guidance for the year. This may indicate that they expect to incur some charges due to acquisitions and the like that may impact their GAAP earnings. They also expect the average selling price of devices utilizing Qualcomm MSM chipsets to increase to $204 to $210 per unit, up from the previously forecasted $199 to $209.
Qualcomm CEO, Paul Jacobs, also stated that they have already begun earlier than expected wide sampling of their MSM 8960 Dual-Core LTE processor to partners. The MSM 8960 will be the first Qualcomm snapdragon device powering Windows 8. He also stated that they have continued their licensing business and expect to have strong growth in their licensing business long into the following decade.
At the current moment, Qualcomm stock closed up $0.32 to $57.30 or 0.56%. In after hours trading, though, Qualcomm is down $1.29 or 2.27% at $56.00.