The 10-second takeaway
For the quarter ended March 31 (Q2), QUALCOMM met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share expanded significantly. GAAP earnings per share dropped significantly.
Margins contracted across the board.
QUALCOMM booked revenue of $6.12 billion. The 36 analysts polled by S&P Capital IQ expected revenue of $6.08 billion on the same basis. GAAP reported sales were 24% higher than the prior-year quarter's $4.94 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.17. The 38 earnings estimates compiled by S&P Capital IQ predicted $1.17 per share. Non-GAAP EPS of $1.17 for Q2 were 16% higher than the prior-year quarter's $1.01 per share. (The prior-year quarter included $0.44 per share in earnings from discontinued operations.) GAAP EPS of $1.06 for Q2 were 17% lower than the prior-year quarter's $1.28 per share. (The prior-year quarter included $0.44 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 61.3%, 260 basis points worse than the prior-year quarter. Operating margin was 30.6%, 40 basis points worse than the prior-year quarter. Net margin was 30.5%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $5.90 billion. On the bottom line, the average EPS estimate is $1.03.
Next year's average estimate for revenue is $24.13 billion. The average EPS estimate is $4.52.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 2,570 members out of 2,711 rating the stock outperform, and 141 members rating it underperform. Among 527 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 508 give QUALCOMM a green thumbs-up, and 19 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on QUALCOMM is outperform, with an average price target of $74.77.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.