This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Qualcomm Looks Set For Strong Growth

NEW YORK ( TheStreet) - Qualcomm (QCOM - Get Report) reports its fourth-quarter results after market close with analysts eyeing robust future growth from the key Apple (AAPL - Get Report) partner.

"We believe Qualcomm is well positioned to post strong earnings growth during F2013 due to stable royalty rates, strong connected tablet and smartphone sales driving stable ASP (Average Selling Price) trends, increasing market share for integrated chipsets as 28-nanometer supply improves, and strong 3G device sales in emerging markets," wrote Canaccord Genuity analyst Mike Walkley, in a recent note.

Apple's new iPhone 5, in particular, looks set to boost Qualcomm. The San Diego-based company provides a power management chip, an LTE modem and an RF Transceiver for the Apple phone, continuing its strong partnership with the tech giant.

Canaccord Genuity's checks indicate strong demand for the iPhone 5, which contains Qualcomm's MDM 9615 LTE technology. The firm also has high expectations for forthcoming Qualcomm-powered Android LTE smartphones from the likes of Motorola, LG and HTC, as well as Microsoft (MSFT - Get Report) LTE Windows 8 phones from Nokia (NOK - Get Report) and HTC.

The next few months could therefore serve as the launchpad for a strong 2013, as the company lives up its billing as one of big beneficiaries of the push to LTE.

"We believe improving 28-nanometer supply and strong sales of high-priced LTE smartphones, such as the LTE iPhone 5 during Q4/C2012, combined with an increasing mix of connected tablets should result in higher CDMA device ASPs during the important December quarter holiday season," wrote Walkley. "We believe this could result in improved Q2/F2013 CDMA device ASPs."

Set against this backdrop, Qualcomm could offer investors a buying opportunity.

Nomura Equity Research analyst Romit Shah upgraded Qualcomm to buy from neutral earlier this week. Investors, he noted, are underestimating growth in Qualcomm Technology Licensing (QTL), its royalty business.

"QTL, which accounts for 75% of operating profits, has been a good business thus far (5-year sales CAGR 16%)," he wrote, explaining that 3G penetration rates in developed markets are a key driver. "However, the market in our opinion is underestimating 3G adoption in the emerging regions (Brazil, Russia, China and India)."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $113.29 0.00%
MSFT $43.93 0.00%
NOK $6.32 0.00%
QCOM $57.45 0.00%
SWKS $88.62 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs