Summary
QUALCOMM Incorporated (QCOM) reported its third quarter fiscal year 2016 results, showing a revenue increase of 4% year-over-year to $6.04 billion, driven by both its Equipment and Services (QCT) and Technology Licensing (QTL) segments. Net income attributable to Qualcomm also saw a significant jump of 22% to $1.44 billion, or $0.97 per diluted share. This performance reflects continued strength in its licensing business, partially offset by a decline in integrated circuit shipments. The company continues to navigate a complex industry landscape, with ongoing investments in 4G LTE and future 5G technologies. Management highlighted the opportunities in China with the rollout of 4G LTE and the expansion in emerging regions. However, challenges remain, including ongoing regulatory investigations in various jurisdictions and ongoing patent licensing disputes, particularly with certain licensees in China who are believed to be not fully complying with their contractual obligations. Qualcomm is actively managing its capital structure, returning capital to shareholders through dividends and share repurchases, with $3.2 billion remaining under its authorization. The company also announced a strategic realignment plan aimed at improving financial performance and driving profitable growth through cost reductions. A significant planned development is the formation of a joint venture with TDK Corporation for radio frequency front-end modules, expected to close in early 2017.
Financial Highlights
51 data points| Revenue | $6.04B |
| Cost of Revenue | $2.53B |
| Gross Profit | $3.51B |
| R&D Expenses | $1.27B |
| SG&A Expenses | $620.00M |
| Operating Expenses | $4.45B |
| Operating Income | $1.59B |
| Interest Expense | $75.00M |
| Net Income | $1.44B |
| EPS (Basic) | $0.98 |
| EPS (Diluted) | $0.97 |
| Shares Outstanding (Basic) | 1.47B |
| Shares Outstanding (Diluted) | 1.49B |
Key Highlights
- 1Total revenues increased by 4% year-over-year to $6.04 billion.
- 2Net income attributable to Qualcomm rose 22% year-over-year to $1.44 billion.
- 3Diluted earnings per share (EPS) increased to $0.97 from $0.73 in the prior year quarter.
- 4Equipment and services revenues remained flat year-over-year at $3.87 billion, despite an 11% decrease in MSM integrated circuit shipments.
- 5Licensing revenues increased by 6% year-over-year to $2.17 billion, boosted by revenue recognition from the LG Electronics arbitration settlement.
- 6The company continued its capital return program, repurchasing $3.7 billion of stock and paying $2.2 billion in dividends during the first nine months of the fiscal year.
- 7Qualcomm is proceeding with a Strategic Realignment Plan aimed at cost reduction and improved financial performance, expecting substantial implementation by the end of fiscal 2016.