What to Expect When Qualcomm (QCOM) Reports Earnings

Qualcomm (QCOM) shares are mostly flat ahead of the chipmaker's fiscal fourth quarter earnings report, which is due after the market closes.
By Lindsay Ingram ,

NEW YORK (TheStreet) -- Shares of Qualcomm (QCOM) - Get Report were falling 0.1% to $60.82 in morning trading on Wednesday, ahead of the chipmaker's fourth quarter of fiscal 2015 earnings report, which is due after the market closes.

Analysts expect Qualcomm to report earnings of 86 cents a share and revenue of $5.21 billion for the fiscal fourth quarter.

Qualcomm reported earnings of 99 cents a share for the third quarter of fiscal 2015, above analysts' estimates of 95 cents a share. The chipmaker reported revenue of $5.83 billion for the fiscal third quarter, compared to analysts' estimates of $5.85 billion.

The company reported earnings of $1.26 a share in the fourth quarter of fiscal 2014, below analysts' estimates of $1.31 a share. Qualcomm saw revenue of $6.69 billion in the year-ago quarter, below analysts' estimates of $7.01 billion.

TheStreet Ratings team rates QUALCOMM INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

We rate QUALCOMM INC (QCOM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 3.83, which clearly demonstrates the ability to cover short-term cash needs.
  • QUALCOMM INC's earnings per share declined by 44.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, QUALCOMM INC increased its bottom line by earning $4.40 versus $3.91 in the prior year. This year, the market expects an improvement in earnings ($4.61 versus $4.40).
  • The gross profit margin for QUALCOMM INC is rather high; currently it is at 63.08%. Regardless of QCOM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, QCOM's net profit margin of 20.30% compares favorably to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Communications Equipment industry. The net income has significantly decreased by 47.1% when compared to the same quarter one year ago, falling from $2,238.00 million to $1,184.00 million.
  • Net operating cash flow has decreased to $2,116.00 million or 20.83% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: QCOM

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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