How Qualcomm Slipped Up in Q3

Qualcomm Inc. (NASDAQ: QCOM) reported fiscal third-quarter financial results after markets closed Wednesday. The firm said that it had $0.80 in earnings per share (EPS) and $4.9 billion in revenue, compared with consensus estimates that called for $0.75 in EPS and $5.08 billion in revenue. The same period from last year had $1.00 in EPS and $5.6 billion in revenue.

During the third quarter, Qualcomm paid cash dividends totaling $755 million, or $0.62 per share. At the end of the quarter, the firm has $7.8 billion remaining in its share repurchase authorization and it will be paying a cash dividend of $0.62 per share on September 26.

In terms of its segments, Qualcomm reported:

  • QCT revenues decreased 13% year over year to $3.57 billion, with earnings before taxes (EBT) of $504 million.
  • QTL revenues decreased 10% to $1.29 billion, with EBT of $898 million.

Looking ahead to the fiscal fourth quarter, the company expects to see EPS in the range of $0.65 to $0.75 and revenue in the range of $4.3 billion to $5.1 billion. Consensus estimates are calling for $1.08 in EPS and $5.63 billion in revenue for the coming quarter.

Steve Mollenkopf, CEO of Qualcomm, commented:

We delivered another solid quarter operationally in the midst of slower demand for 4G devices as the market prepares for the global transition to 5G. Our 5G design wins have doubled over the last three months, leaving us extremely well positioned as 5G ramps in early calendar year 2020.

Shares of Qualcomm closed Wednesday at $73.16, with a 52-week range of $49.10 to $90.34. The consensus analyst price target is $86.51. Following the announcement, the stock was down 4.0% at $70.25 in the after-hours session.