) announced that its board of directors has authorized a new $5
billion share buyback program, effective immediately. The new
program will replace the existing $5 billion share buyback
program which was declared on Mar 5, 2013. To date, the company
has repurchased around 40.1 million shares for approximately $2.7
billion assigned under the previously announced share buyback
The tenure of the new share buyback program will depend on
management's discretion. The company can conduct share repurchase
either in the open market, through 10b5-1 programs, in privately
negotiated transactions or through the use of derivative
instruments. Qualcomm stated that since 2003, the company
returned $25 billion to its shareholders through either share
buybacks or dividend payouts.
Qualcomm is a major chipset supplier to Samsung, which is
currently the largest seller of smartphones globally.
Additionally, the company is a major chipset supplier to
) for its popular iPhones. Furthermore,
) has decided to use Qualcomm's Snapdragon processor for its
latest Nexus 7 tablets. The company has also been favored by the
Windows 8 operating system of
Earlier, Qualcomm raised its outlook for fiscal 2013 and is
quite confident that it will be able to retain its current rate
of revenue and earnings growth, going forward. We believe that
the long-term fundamentals of the company remain intriguing given
the increasing demand for LTE-enabled mobile handsets in the
developed countries, rapid transition from 2G to 3G and 4G in
China and India and increasing licensing revenues. Qualcomm has a
very healthy cash position.
Recently, Qualcomm unveiled an innovative smartwatch called
"Toq". This smartwatch can simultaneously receive phone calls,
send messages and play music. The new product will be available
in the market from the fourth quarter of 2013. Qualcomm currently
has a Zacks Rank #3 (Hold).
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