Summary
Qualcomm Inc. (QCOM) reported its first quarter fiscal year 2016 results, showcasing a challenging period marked by a revenue decline of 19% year-over-year to $5.8 billion and a 24% decrease in net income attributable to Qualcomm to $1.5 billion. This performance was primarily driven by a 10% decrease in MSM integrated circuit shipments and continued headwinds in the QCT segment due to shifts in customer share, a large customer's declining share, and a competitive environment in China. Licensing revenues also saw a 12% decline, impacted by a revenue deferral related to an arbitration with LG Electronics and underreported royalties. Despite the revenue pressures, Qualcomm continues to execute strategic initiatives. The company recognized a significant $380 million gain from the sale of its UK wireless spectrum. Furthermore, Qualcomm announced a strategic realignment plan aimed at cost reduction and improved financial performance, with substantial implementation expected by the end of fiscal 2016. The company also declared a dividend of $0.48 per share, signaling a commitment to returning capital to shareholders, and continues its substantial stock repurchase program. Looking ahead, Qualcomm anticipates continued growth opportunities in China with the rollout of 4G LTE, and expansion in emerging regions, while also navigating ongoing regulatory investigations and competitive pressures.
Financial Highlights
50 data points| Revenue | $5.78B |
| Cost of Revenue | $2.53B |
| Gross Profit | $3.24B |
| R&D Expenses | $1.35B |
| SG&A Expenses | $578.00M |
| Operating Expenses | $4.09B |
| Operating Income | $1.69B |
| Interest Expense | $74.00M |
| Net Income | $1.50B |
| EPS (Basic) | $1.00 |
| EPS (Diluted) | $0.99 |
| Shares Outstanding (Basic) | 1.50B |
| Shares Outstanding (Diluted) | 1.52B |
Key Highlights
- 1Total revenues for the first quarter of fiscal 2016 decreased by 19% to $5.8 billion, compared to $7.1 billion in the prior year.
- 2Net income attributable to Qualcomm decreased by 24% to $1.5 billion, or $0.99 per diluted share, compared to $2.0 billion, or $1.17 per diluted share, in the prior year.
- 3MSM integrated circuit shipments declined by 10% to approximately 242 million units.
- 4QCT segment revenues decreased by 22% year-over-year, impacted by customer share shifts and competition in China.
- 5QTL segment revenues decreased by 12% year-over-year due to a revenue deferral related to LG Electronics arbitration and underreported royalties.
- 6The company recorded a $380 million gain from the sale of its UK wireless spectrum.
- 7Qualcomm announced a Strategic Realignment Plan to improve execution and financial performance, including cost reductions and workforce adjustments.