Qualcomm Reports Record Revenues for 2Q 2011

Today, Qualcomm [NASDAQ:QCOM] announced their earnings for the first calendar quarter of 2011 and the second fiscal quarter of 2011. Since Qualcomm?s quarters are one quarter ahead, we will be noting that fact whenever we mention the quarter. Qualcomm reported their fiscal 2Q 2011 earnings with $3.88B in revenue, the most the company has ever seen. Their revenue represents an increase of 46% from the same quarter a year ago and an increase of 16% from the previous quarter; fiscal 1Q 2011. On the $3.88B in revenue, Qualcomm has managed to attain net income of $999 Million up 29% from the quarter a year ago and down 15% from the previous quarter fiscal 1Q 2011. This resulted in an EPS of 59 cents per share up 28% from the same quarter a year ago and down 17% sequentially. Qualcomm beat estimates on revenue, but lagged in net income.

When it came to Qualcomm?s biggest business segment, their CDMA-based MSM shipments, they had shipped approximately 118 Million units, up 27% from the quarter a year ago and flat when compared to last quarter?s earnings.

Qualcomm?s earnings were once again stifled by a GAAP write down of $310M in expenses in the QSI segment related to FLO TV restructuring plan as well as an additional $120M in impairment charges for the Firethorn division. For those unfamiliar, Qualcomm plans on restructuring FLO TV out of their corporate structure and effectively restructuring those employees into different divisions due to the failure of FLO TV. Qualcomm expects to lose an additional $65 as the restructuring of FLO TV and MediaFLO technologies continues. Qualcomm also has agreed to sell their entire 700MHz spectrum for $1.9B pending FCC approval. Firethorn is Qualcomm?s new division that attempts to incorporate mobile banking into none other than cell phones. This is an arena that is expected to grow and is likely to earn Qualcomm money in the future.

As Qualcomm reports their earnings, they have also announced their guidance for 3Q 2011 as well as fiscal year 2011. They expect revenues between $3.35B and $3.65B with an EPS ranging from $0.60 to $0.64, essentially stating that they expect to improve their margins and net income. They also expect their shipments to range between 115M and 119M still sitting within their current range, but giving room for growth. In addition to that, Qualcomm revised their guidance for FY 2011 by raising their expected revenue by $500M and their EPS by nearly $0.20. This represents a strong signal from Qualcomm that they expect this year to be even better than the last since they had earned $10B last year in revenue and expect to earn over $14B this year. Representing a 40% increase in revenue year over year.

At the current pace, Qualcomm has every reason to be confident in their ability to perform in the mobile arena. They have already successfully launched their first LTE cell phone, the HTC Thunderbolt, and they have already successfully launched an LTE Modem as well in the Samsung Verizon 4G LTE Hotspot. As Verizon?s customers begin to switch to 4G LTE, there is an ever increasing likelihood that Qualcomm will see increased revenues from this new and exciting technology. Qualcomm is also exerting a lot of effort to make themselves a player in the tablet market as well and we are likely to see some tablets coming soon with Qualcomm chipsets. As it seems, Qualcomm is continuing to deliver on their performance promises and is working well with device manufacturers and carriers to deliver a superior device. With the addition of Apple to their client portfolio, there is no reason to assume Qualcomm will end their leadership any time soon.

At the moment of writing, Qualcomm was up $1.85 or 3.46% in regular trading, and is also up an additional $2.94 or 5.32% in afterhours trading. This results in a one day jump of over 8% for QCOM to $58.21.