) reported solid financial results for the second quarter of
fiscal 2013 that meet the Zacks Consensus Estimate. Management
has raised its outlook for fiscal 2013 primarily due to the
gradual adoption of LTE networks in North America, rapid
transition from 2G to 3G in China and India, and increasing
However, the revised guidance fell below the current Zacks
Consensus Estimate. As a result, in the after market trade on
NASDAQ, the stock price of Qualcomm was down by $3.80 (5.76%) to
$66. The company is facing severe competitive threat from its
), which has been redesigning its chipsets for the mobile
computing market. Competition is also likely to emanate from
formidable rivals like
). Qualcomm currently has a Zacks Rank #1 (Strong Buy).
Quarterly total revenue of $6,124 million was up 23.9% year
over year, surpassing the Zacks Consensus Estimate of $6,091
million. Segment wise, Qualcomm CDMA Technologies businesses
contributed $3,916 million of revenues in the second quarter, up
28% over the prior-year quarter. Quarterly EBT margin was 17%.
Qualcomm Technology Licensing generated $2,057 million in
revenues, up 19% year over year. Quarterly EBT margin was 88%.
Qualcomm Wireless & Internet segment generated $155 million,
down 3% year over year and its operating profit was zero.
On a GAAP basis, quarterly net income from continuing
operations was $1,866 million or $1.06 per share compared with a
net income of $1,438 million or 86 cents per share in the
year-ago quarter. In the second quarter of fiscal 2013, adjusted
(excluding special items) earnings per share came in at $1.05,
exactly in line with the Zacks Consensus Estimate.
During the second quarter of fiscal 2013, Qualcomm shipped
approximately 173 million CDMA-based MSM chipsets, up 14% year
over year. This figure was far better than the company's guidance
of a mid-point of 168 million. Average selling price of a mobile
handset with an in-built Qualcomm chipset during this quarter was
around $214 -$220.
Quarterly operating income was $1,877 million compared with an
operating income of $1,514 million in the year-ago quarter. Gross
margin was 61.3% compared with 63.9% in the year-ago quarter.
Quarterly operating margin was 30.7% compared with 30.6% in the
prior-year quarter. In the reported quarter, the company returned
$431 million (25 cents per share) to its shareholders in the form
of cash dividends.
During the second quarter of fiscal 2013, Qualcomm generated
$2,216 million of cash from operations compared with $1,888
million in the prior-year quarter. Free cash flow (cash flow from
operations less capital expenditures) during the reported quarter
was $1,927 million compared with $1,612 million in the year-ago
At the end of the second quarter of fiscal 2013, Qualcomm had
$30,539 million of cash and marketable securities and no
outstanding debt on its balance sheet compared with $26,837
million of cash and marketable securities and no outstanding debt
at the end of fiscal 2012.
Third Quarter of Fiscal 2013 Financial
The third-quarter revenue will be within the range of $5.8
billion to $6.3 billion. Non-GAAP earnings per share will be
within the range of 97 cents to $1.05. GAAP earnings per share
will be within the range of 80 cents to 88 cents. Qualcomm is
expected to ship 163 million to 173 million MSM chipsets during
the third quarter of fiscal 2013.
Full Fiscal 2013 Financial Guidance
The fiscal 2013 revenue will be within the range of $24
billion to $25 billion. Non-GAAP earnings per share will be
within the range of $4.40 to $4.56. GAAP earnings per share will
be within the range of $3.78 to $3.93. ASP of mobile handset with
an in-built Qualcomm chipset during fiscal 2013 will be around
$216 to $224.
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QUALCOMM INC (QCOM): Free Stock Analysis
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