Qualcomm Announces Third Quarter Fiscal 2010 Results

Jul 21, 2010
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Qualcomm has come forward and announced their very own third quarter fiscal results, which ended June 27th. While the numbers may not be as staggering as Apple's results, it's still enough to show that Qualcomm is still a presence in every market they make a claim for fame, and they're not going anywhere any time soon. Just try to ignore all those "down from" lines past the break.

First, here's a quick quote:

"Our financial performance this quarter exceeded our prior expectations, driven by record MSM chipset shipments, favorable product mix and continued strong demand for 3G devices around the world," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "Looking forward, we continue to see healthy CDMA-based device growth of approximately 23 percent in calendar year 2010, and are raising both our revenue and earnings guidance for the fiscal year."

It's interesting to see that CDMA-based devices are getting called out for all the love, but at the same time, perhaps it's just a sign of some eventual changes. But, that's just pure speculation, and nothing more. So let's just get into the gritty details, shall we? The third quarter results look like this: overall revenue is a healthy $2.71 billion, but that's down 2 percent year-over-year, while up 2 percent sequentially. Qualcomm's operating income is $792 million, which is down 11 percent year-over-year, but up 2 percent sequentially.

Their net income is at a steady $767 million, which is actually up 4 percent year-over-year, but down 1 percent sequentially. The company's operating cash flow is at $951 million, which is a decrease of 13 percent year-over-year. As far as shipments go, Qualcomm saw 103 million units of CDMA-based Mobile Station Modem (MSM) find their way into the world. In the end, strong numbers all around, and hopefully this means more growth for the company that's giving us our Snapragon love in the years to come.

Press Release:

Reports Record MSM Shipments; Raises Financial Guidance

SAN DIEGO, July 21 /PRNewswire-FirstCall/ -- Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies, products and services, today announced results for the third quarter of fiscal 2010 ended June 27, 2010.

"Our financial performance this quarter exceeded our prior expectations, driven by record MSM chipset shipments, favorable product mix and continued strong demand for 3G devices around the world," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "Looking forward, we continue to see healthy CDMA-based device growth of approximately 23 percent in calendar year 2010, and are raising both our revenue and earnings guidance for the fiscal year."

Third Quarter Results (GAAP)

Revenues: $2.71 billion, down 2 percent year-over-year and up 2 percent sequentially.

Operating income: $792 million, down 11 percent year-over-year and up 2 percent sequentially.

Net income: $767 million, up 4 percent year-over-year and down 1 percent sequentially.

Diluted earnings per share: $0.47, up 7 percent year-over-year and 2 percent sequentially.

Effective tax rate: 21 percent for the quarter.

Operating cash flow: $951 million, down 13 percent year-over-year; 35 percent of revenues.

Return of capital to stockholders: $1.49 billion, including $309 million, or $0.19 per share, of cash dividends paid, and $1.18 billion to repurchase 32.4 million shares of our common stock.

Pro Forma Third Quarter Results

Pro forma results exclude the Qualcomm Strategic Initiatives (QSI) segment, certain share-based compensation, certain tax items that are not related to the current year and acquired in-process research and development (R&D) expense.

Revenues: $2.70 billion, down 2 percent year-over-year and up 1 percent sequentially.

Operating income: $991 million, down 12 percent year-over-year and 7 percent sequentially.

Net income: $936 million, up 4 percent year-over-year and down 5 percent sequentially.

Diluted earnings per share: $0.57, up 6 percent year-over-year and down 3 percent sequentially. The current quarter excludes $0.07 loss per share attributable to certain share-based compensation and $0.03 loss per share attributable to certain tax items.

Effective tax rate: 19 percent for the quarter.

Free cash flow: $954 million, down 8 percent year-over-year; 35 percent of revenues (defined as net cash from operating activities less capital expenditures).

Detailed reconciliations between results reported in accordance with generally accepted accounting principles (GAAP) and pro forma results are included at the end of this news release.

Third Quarter Key Business Metrics

CDMA-based Mobile Station Modem™ (MSM™) shipments: approximately 103 million units, up 10 percent year-over-year and 11 percent sequentially.

March quarter total reported device sales: approximately $25.2 billion, up 19 percent year-over-year and down 9 percent sequentially.

March quarter estimated CDMA-based device shipments: approximately 134 to 138 million units at an estimated average selling price of approximately $183 to $189 per unit.

Cash and Marketable Securities

Our cash, cash equivalents and marketable securities totaled approximately $17.6 billion at the end of the third quarter of fiscal 2010, compared to $18.2 billion at the end of the second quarter of fiscal 2010 and $15.7 billion a year ago. On July 8, 2010, we announced a cash dividend of $0.19 per share payable on September 24, 2010 to stockholders of record as of August 27, 2010.


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