Smartphone Chipmaker Qualcomm Blows Away Analyst Estimates in Q3
November 8, 2012 10:07 AM
Massive profit bests even the highest analyst expectation
It's relatively rare to see every single analyst miss when forecasting a company's earnings. When that happens, you know the news is either very good -- or very bad.
I. A Pleasant Sort of Surprise
Fortunately for Qualcomm, Inc. (
), it falls under the former category. On Tuesday it announced its fiscal Q4 2012
[PDF]. The San Diego, Calif.-based smartphone chipmaker revealed that in the quarter ending in September it made $4.87B USD in revenue and $1.27B USD in net income (profit).
Analysts had predicted a solid, but sleepier $4.66B USD revenue haul, with the actual results approaching the high end of
collected by the UK financial analysis agency
The Financial Times
But the big surprise was the profit. Analysts had expected only $1.16B USD in profit. Even the most optimistic analyst only predicted $1.24B USD in profit ($0.87 USD/share). In other words Qualcomm blew away all the predictions regarding profit, and smoked the average expectation by 9 percent.
[Image Source: Jason Mick/DailyTech]
Dr. Paul E. Jacobs, chairman and CEO of Qualcomm, cheered the strong performance, commenting, "I am very pleased with our performance this year. We delivered record revenues, earnings and MSM chipset shipments driven by increasing global consumption of wireless data across a diverse range of devices, particularly smartphones."
The chipmaking chief predicts "double-digit revenue growth" in fiscal 2013, driven on the back of the company's core chipset and system-on-a-chip businesses.
II. Future Looks Bright
In the fiscal Q4, Qualcomm shipped 141 million Snapdragon chipsets globally, an 11 percent rise from 2011. Additionally, an estimated 210 to 214 million devices sold carried a Qualcomm 3G/4G chip.
Qualcomm makes its system-on-a-chip central processing units based on licensed instruction sets and intellectual property cores from UK reduced instruction set computer (RISC) architecture giant ARM Holdings plc (
). Currently, Qualcomm's big push involves
the 28 nm Snapdragon 4
, manufactured by Taiwan Semiconductor Manufacturing Comp., Ltd. (
Electronics Comp., Ltd. (
). While many Snapdragon 4 chips are destined for traditional Android smartphones/tablets, the Qualcomm chips
are also popping up
in Windows 8 tablets, a pivotal new business target.
The Windows RT Samsung Ativ Tab carries a Snapdragon 4 SoC.
Qualcomm, which offers a quarterly dividend to shareholders, has also been repurchasing stock to further share its profits with investors. The company is currently sitting on $26.8B USD in cash, meaning that it has a lot of money for acquisitions, should it choose to make a move.
Compared to some other ARM-architecture chipmakers
like NVIDIA Corp. (
), Qualcomm's Q1 2013 outlook is relatively optimistic. Despite a slowing semiconductor and device market, the Californian company hopes to sustain double-digit growth in many metrics over the holiday. The only expected dip is in diluted shares, as Qualcomm moves to shutter its discontinued
Flo TV business
FT [analyst estimates]
"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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