Qualcomm (QCOM) Gains After Earnings Report

NEW YORK (TheStreet) -- Qualcomm (QCOM) gained 2.8% to $73.09 in after-hours trading Wednesday following its fiscal first-quarter earnings report.

The chipmaker posted revenue of $6.62 billion, up 10% from the year-ago quarter. Analysts surveyed by Thomson Reuters estimated earnings of $6.665 billion for the quarter. Qualcomm reported GAAP diluted earnings of $1.09 a share, and non-GAAP earnings of $1.26 a share, beating analysts estimates of $1.18 a share.

Qualcomm predicts revenue of between $6.1 billion and $6.7 billion in the quarter that ends in March. Analysts surveyed revenue of $6.723 billion in the quarter.

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

"We rate QUALCOMM INC (QCOM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and increase in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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

  • QCOM's revenue growth has slightly outpaced the industry average of 23.6%. Since the same quarter one year prior, revenues rose by 33.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • QCOM's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.28, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Communications Equipment industry and the overall market, QUALCOMM INC's return on equity exceeds that of both the industry average and the S&P 500.
  • QUALCOMM INC has improved earnings per share by 19.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, QUALCOMM INC increased its bottom line by earning $3.91 versus $3.06 in the prior year. This year, the market expects an improvement in earnings ($5.07 versus $3.91).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Communications Equipment industry average. The net income increased by 18.1% when compared to the same quarter one year prior, going from $1,271.00 million to $1,501.00 million.

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