10-QPeriod: Q2 FY2012

QUALCOMM INC/DE Quarterly Report for Q2 Ended Mar 25, 2012

Filed April 18, 2012For Securities:QCOM

Summary

Qualcomm Inc. reported strong financial performance for the quarter ended March 25, 2012, with total revenues of $4.94 billion, a significant increase from the prior year's $3.87 billion. Net income also saw a substantial jump to $2.2 billion, up from $995 million in the same period last year. This growth was driven by strong performance in the Equipment and Services segment, particularly from its Qualcomm CDMA Technologies (QCT) division, which saw a substantial increase in MSM integrated circuit shipments. A significant contributor to the quarter's results was the $1.2 billion gain recognized from the sale of 700 MHz spectrum, which boosted net income significantly. The company's balance sheet shows robust liquidity, with cash, cash equivalents, and marketable securities totaling $26.6 billion. Qualcomm continues to return capital to shareholders through dividends and share repurchases, announcing an increase in its quarterly dividend and a significant new stock repurchase authorization. Despite strong results, Qualcomm faces ongoing challenges related to intense competition, rapid technological change, and various legal and regulatory matters, as detailed in the filing.

Financial Highlights

49 data points
Beta

Revenue

$4.94B

63.9% Gross Margin

Net Income

$2.23B

45.1% Net Margin

EPS (Diluted)

$1.28

Total Assets

$41.53B

Cash & Equivalents

$6.00B

Free Cash Flow

$1.89B

Financial Statements
Beta
Revenue$4.94B
Cost of Revenue$1.78B
Gross Profit$3.16B
R&D Expenses$954.00M
SG&A Expenses$595.00M
Operating Income$1.51B
Interest Expense$29.00M
Net Income$2.23B
EPS (Basic)$1.31
EPS (Diluted)$1.28
Shares Outstanding (Basic)1.70B
Shares Outstanding (Diluted)1.74B

Key Highlights

  • 1Total revenues increased by 27.7% year-over-year to $4.94 billion for the quarter ended March 25, 2012.
  • 2Net income attributable to Qualcomm surged by 123.2% to $2.23 billion, or $1.28 per diluted share.
  • 3MSM integrated circuit shipments increased by 29% year-over-year to 152 million units.
  • 4The company recognized a significant $1.2 billion gain from the sale of 700 MHz spectrum, contributing to the strong net income.
  • 5Cash, cash equivalents, and marketable securities stood at $26.6 billion as of March 25, 2012, indicating strong liquidity.
  • 6Qualcomm announced an increased quarterly dividend and a new $4.0 billion stock repurchase program authorization.

Frequently Asked Questions

The primary driver of revenue growth was the Equipment and Services segment, specifically the Qualcomm CDMA Technologies (QCT) division. This was fueled by a 29% increase in MSM integrated circuit shipments and a substantial rise in total reported device sales. The licensing segment (QTL) also contributed positively, though its revenue growth was more modest.

The sale of substantially all of its 700 MHz spectrum on December 27, 2011, resulted in a significant gain of $1.2 billion recognized in discontinued operations during the second quarter of fiscal 2012. This gain substantially boosted the company's net income for the period.

Qualcomm maintains a very strong liquidity position, with cash, cash equivalents, and marketable securities totaling $26.6 billion as of March 25, 2012. The company continues to return capital to shareholders by increasing its quarterly cash dividend and authorizing a new stock repurchase program of up to $4.0 billion.

Qualcomm faces several risks, including intense competition in the rapidly evolving technology sector, potential delays in the deployment of new wireless technologies (like 4G LTE), reliance on a few key customers and licensees, ongoing litigation and regulatory scrutiny in various jurisdictions, and the potential impact of global economic conditions on demand for wireless devices.