QUALCOMM, Inc.(QCOM) Blows Past Estimates Again

Riding the revolution in mobile computing and smartphone technology, a number of companies have been able to grow to spectacular proportions. QUALCOMM, Inc. (NASDAQ:QCOM) has been beating analyst estimates consistently over the last few years, as well as growing earnings impressively. The company, which is a main supplier for smartphone and tablet makers worldwide, looks well positioned for growth and profitability this year. While the recent run-up in share price has left the company trading at a bit of a premium to the industry, it seems fair to expect further upside for the stock.

Stock at a Glance

Qualcomm designs, develops, and manufactures digital communications equipment and is probably best known for its processor chips that are used in a range of mobile computing devices manufactured by Apple and Samsung among other big names. Qualcomm has a market cap of nearly $110 billion and a dividend yield of around 1.5%. With a beta of 1.27, the stock is slightly more volatile than the overall market. In the last twelve months the stock has rallied around 8%.

Earnings and Cash Position

Once again, Qualcomm delivered blowout earnings for the quarter. For Q1 2013 delivered top line and bottom line growth well above analyst estimates. EPS came in at $1.26, beating by about 11%, and was up 30% compared to the same period a year ago. Revenue was up 29% for another record quarter. Despite Apple Inc. (NASDAQ:AAPL) cutting orders for iPhone 5 parts due to weaker-than-expected demand, which has many investors spooked, Qualcomm shipped 182 million MSM chips which was above the company’s prior expectations. As we all know by now, Apple has been slammed by the markets in recent months due to fears of slowing sales, having had over a third knocked off their stock price since setting highs of around $700 in September of last year. Apple missed EPS estimates in the 2nd half of 2012, but had a healthy beat to start off this year. Qualcomm hasn’t been too badly affected by the Apple sell-off, as they supply chips to several other major tech companies as well.

Qualcomm’s management, while remaining cautious due to macro-economic difficulties, has reaffirmed its device shipment estimate, and raised fiscal 2013 revenue guidance by $5 million. The company raised its EPS target by 13 cents for a full-year guidance between $4.25 and $4.45. The company has a very healthy balance sheet with over $12 billion in cash and only around $60 million debt. For the report, the company had an impressive $2 billion in operating cash flow up 11% YoY. This gives the company plenty of means to invest in R&D, necessary to remain competitive, although R&D spending was down a bit sequentially.