Qualcomm Jumps on Big Profit Beat


Qualcomm Inc. (NASDAQ: QCOM) reported third fiscal quarter 2016 results after markets closed on Wednesday. The chipmaker posted adjusted diluted earnings per share (EPS) of $1.16 and revenues of $6 billion. In the second quarter of 2015, Qualcomm reported EPS of $0.99 on revenues of $5.8 billion. Thomson Reuters had estimates for EPS of $0.97 and $5.58 billion in revenue.

On a GAAP basis Qualcomm reported EPS of $0.97, including pre-tax earnings and other items totaling $2.14 billion. Adjusted net income totaled $1.73 billion compared with $1.4 billion in GAAP net income.

Steve Mollenkopf, the company’s CEO, had this to say about the realignment:

We delivered strong results this quarter, with EPS well ahead of our guidance based on meaningful progress with licensees in China. Our chipset business is also benefiting from a strong new product ramp across tiers, particularly with fast growing OEMs in China. We are executing well on our strategic priorities, and we remain confident that our focused investments in 5G and other advanced technologies will create a strong foundation for long-term earnings growth.

During the quarter the company returned $781 million to shareholders in the form of dividends and $100 million in share repurchases. The quarterly dividend is $0.53 per share.

In its outlook for its fourth fiscal quarter, Qualcomm guided revenues in a range of $5.4 to $6.2 billion compared with $5.5 billion actual in the fourth quarter a year ago. Adjusted EPS is forecast in a range of $1.05 to $1.15, compared with an actual total of $0.91 last year. Analysts were expecting fourth-quarter EPS of $1.08 on revenues of $5.73 billion.

Qualcomm did not provide full-year estimates, but analysts’ consensus full year estimates call for EPS of $4.07 and revenues of $22.6 billion.

Shares closed at $55.82 Wednesday, up 1.2% for the day. In the after-hours session the stock traded up about 5.5% at $58.87 in a 52-week range of $42.24 to $64.97. The consensus price target is $57.91.

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