QUALCOMM Taking a Much Needed Breather After Earnings

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QUALCOMM Inc. (NASDAQ: QCOM) is out with yet another earnings report. The semiconductor leader has won handily from its mobile processors used in tablets and smartphones. Earnings came in at $1.05 earnings per share and revenue growth was up to $6.48 billion. Thomson Reuters had estimates pegged at $1.08 in earnings per share and $6.34 billion in revenue.

QUALCOMM also offered quarterly guidance of $1.10 to $1.20 in earnings per share on revenue of $6.3 to $6.9 billion. Thomson Reuters was calling for $1.29 EPS and $6.99 billion.

The company’s MSM chip shipments were 190 million units in the quarter, up 35 percent y-o-y and 10 percent sequentially. It is targeting some 195 million to 210 million units for the next quarter.

Another issue was that cash and cash equivalents totaled $29.4 billion at the end of fiscal 2013 and the company repurchased and retired 50.7 million shares of common stock for some $3.32 billion. QUALCOMM telegraphed that it plans to spend close to $4 billion in stock repurchases over the next year under the company’s existing stock repurchase program.

While we would have just assumed going into earnings that the street was going to demand a lot, the stock has been far less volatile than others this year. In fact, its gain going into the close was only about 14% so far for all of 2013. This was also the fiscal year-end for QUALCOMM’s 2013 and its valuation based upon pre-guidance estimates for 2014 was only 14-times earnings.

The new company targets for the fiscal year ahead are $4.95 to $5.15 in adjusted earnings per share and sales of $26 billion to $27.5 billion. The consensus estimates are $4.95 EPS and $27.5 billion in sales.

QUALCOMM shares closed up 1% at $69.74 against a 52-week trading range of $58.11 to $70.37. The consensus analyst price target going into earnings was $74.57 and its market cap is now $119 billion.

The stock is indicated down almost 4% at $66.99 in the after-hours trading session. Maybe a pullback in the coming days will just be an opportunity for those who missed the boat so far. Stay tuned.

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