QUALCOMM Incorporated Price, Consensus and EPS Surprise

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Revenues

On a GAAP basis, total revenues in the fiscal first quarter were record high at $11.67 billion, up from $9.94 billion in the year-ago quarter. The quarterly revenues beat the consensus mark of $10.89 billion. Qualcomm registered record automotive revenues for the sixth consecutive quarter owing to solid momentum in the Snapdragon Digital Chassis platform. Strength within the handset and industrial Internet of Things (IoT) businesses also buoyed the top line.

Segment Results

Quarterly revenues from Qualcomm CDMA Technologies (QCT) were record high at $10.08 billion, up from $8.42 billion a year ago, as strength in the automotive platform and higher demand in handsets, along with normalization of channel inventory within the IoT business, aided the top-line growth. The company witnessed solid market traction in the EDGE networking business that helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets.

Automotive revenues rose 61% to a record high of $961 million, driven by increased content in new vehicle launches with its Snapdragon Digital Chassis platform, with automakers deploying high-performance, low-power computing and connectivity chips to bring next-generation experience to consumers. Handset revenues jumped 13% to an all-time high of $7.57 billion, led by healthy traction in premium Android handsets. IoT revenues were up 36% to $1.55 billion on new product launches and channel inventory normalization. EBT margin for the QCT segment rose to 32% from 31%.

Qualcomm Technology Licensing (QTL) revenues totaled $1.54 billion, up 5% year over year, as it remained the industry's most extensive licensing program of cellular essential patents. EBT margin improved to 75% from 74%.

Cash Flow & Liquidity

Qualcomm generated $4.59 billion of net cash from operating activities in the first quarter of fiscal 2025 compared with $2.95 billion a year ago. As of Dec. 29, 2024, the company had $8.71 billion in cash and cash equivalents and $13.21 billion of long-term debt. The company repurchased 11 million shares for $1.8 billion during the quarter.

Q2 Guidance

For the second quarter of fiscal 2025, Qualcomm expects GAAP revenues of $10.3-$11.5 billion due to market stabilization, recovery in market demand and portfolio strength. Non-GAAP earnings are projected to be $2.70-$2.90 per share, while GAAP earnings are likely to be $2.38-$2.58 per share. Revenues from QTL are expected to be between $1.25 billion and $1.45 billion. For QCT, the company anticipates revenues between $8.9 billion and $9.5 billion, with 10% growth in handset revenues, about a 15% rise in IoT and a 50% improvement in automotive revenues.

Zacks Rank

Qualcomm currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Arista Networks Inc. ANET is scheduled to release fourth-quarter 2024 earnings on Feb.18. The Zacks Consensus Estimate for earnings is pegged at 57 cents per share, suggesting a growth of 9.6% from the year-ago reported figure.

Arista has a long-term earnings growth expectation of 17.1%. ANET delivered an average earnings surprise of 14.8% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release fourth-quarter 2024 earnings on Feb. 20. The Zacks Consensus Estimate for earnings is pegged at $1.52 per share, indicating a decline of 10.1% from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 6.1%. AKAM delivered an average earnings surprise of 2.7% in the last four reported quarters.

Workday, Inc. WDAY is slated to release fourth-quarter fiscal 2025 earnings on Feb 25. The Zacks Consensus Estimate for earnings is pegged at $1.74 per share, indicating growth of 10.8% from the year-ago reported figure.

Workday has a long-term earnings growth expectation of 21%. WDAY delivered an average earnings surprise of 9.3% in the last four reported quarters.