Summary
Qualcomm Inc. (QCOM) reported its third quarter and nine-month results for fiscal year 2015, showing a decline in equipment and services revenue but an increase in licensing revenue. Total revenues for the third quarter were $5.8 billion, a decrease from $6.8 billion in the prior year quarter, primarily driven by a significant drop in the QCT (Qualcomm CDMA Technologies) segment. However, the QTL (Qualcomm Technology Licensing) segment demonstrated strength with increased revenues. Net income attributable to Qualcomm for the third quarter was $1.2 billion. The company continued its aggressive capital return program, announcing a $15 billion stock repurchase authorization and executing a $5 billion accelerated share repurchase. In May 2015, Qualcomm also issued $10 billion in long-term debt, a significant portion of which was used to fund the share repurchases. The company highlighted ongoing strategic realignment efforts aimed at improving execution and financial performance, including anticipated cost reductions.
Financial Highlights
51 data points| Revenue | $5.83B |
| Cost of Revenue | $2.45B |
| Gross Profit | $3.38B |
| R&D Expenses | $1.41B |
| SG&A Expenses | $621.00M |
| Operating Expenses | $4.60B |
| Operating Income | $1.24B |
| Interest Expense | $32.00M |
| Net Income | $1.18B |
| EPS (Basic) | $0.74 |
| EPS (Diluted) | $0.73 |
| Shares Outstanding (Basic) | 1.61B |
| Shares Outstanding (Diluted) | 1.63B |
Key Highlights
- 1Total revenues for the third quarter of fiscal 2015 decreased by 14.3% year-over-year to $5.83 billion, largely due to a decline in Equipment and Services revenue, which fell 21.9% to $3.84 billion.
- 2Licensing revenue, however, increased by 5.7% year-over-year to $1.99 billion, indicating continued strength in Qualcomm's intellectual property monetization.
- 3Net income attributable to Qualcomm for the third quarter decreased significantly to $1.18 billion ($0.73 per diluted share) from $2.24 billion ($1.31 per diluted share) in the same period last year.
- 4The company significantly increased its debt, issuing $10.0 billion in notes in May 2015, primarily to fund accelerated share repurchase agreements and other corporate purposes.
- 5Qualcomm repurchased $5.0 billion of its common stock under accelerated share repurchase agreements in May 2015 and announced a new $15 billion stock repurchase authorization.
- 6The company is implementing a Strategic Realignment Plan, which includes cost reduction measures projected to save approximately $1.1 billion annually, aiming to improve execution and financial performance.
- 7Significant legal and regulatory challenges persist, including ongoing investigations by the FTC and European Commission related to anti-competitive practices, and a previously resolved fine from China's NDRC ($975 million).