Qualcomm (QCOM) is scheduled to report results of its fiscal first quarter after the market closes on February 5 with a conference call scheduled for 4:45 pm ET. What to watch for:
1. EPS CONSENSUS UP A TICK: Along with its last report, Qualcomm guided for Q1 earnings per share of 80c-90c on revenue of $4.4B-$5.2B. At the time, analysts were expecting the company to report Q1 EPS of 83c on revenue of $4.86B, but those figures have since changed to 85c and $4.83B, respectively.
2. JPMORGAN "INCREASINGLY POSITIVE": Last week, JPMorgan analyst Samik Chatterjee maintained an Overweight rating and $108 price target on Qualcomm, saying he was "increasingly positive" on the shares heading into the company's Q1 earnings report. Chatterjee said that the recent strong results and guidance from Skyworks (SWKS) and Qorvo (QRVO) bear proof to the "robust" pipeline of 5G smartphone launches planned as well as to the content opportunity in 5G smartphones. The analyst added that the current valuation is ascribing almost zero value to the 5G opportunity for Qualcomm outside of Apple (AAPL).
3. GM DRIVER-ASSISTANCE: Last month, Qualcomm announced at the 2020 Consumer Electronics Show its continued collaboration with General Motors (GM) to deliver "state-of-the-art" driving experiences to current and upcoming vehicles. As a part of the long-standing relationship, GM plans to continue working with Qualcomm Technologies to power digital cockpit, telematics and advanced driver-assistance systems, Qualcomm said at the time.
4. SIA SEMICONDUCTOR SALES: Last week, the Semiconductor Industry Association, or SIA, announced that global semiconductor industry sales were $412.1B in 2019, a decrease of 12.1% compared to the 2018 total. Global sales for the month of December 2019 reached $36.1B, a decline of 5.5% compared to the December 2018 total and 1.7% less than the total from November 2019. Fourth-quarter sales of $108.3B were 5.5% lower than the total from the fourth quarter of 2018, but 0.9% higher than the third quarter of 2019.
5. S&P OUTLOOK: In early December, S&P Global Ratings affirmed its 'A-' issuer credit rating on Qualcomm and revised its outlook to Stable from Negative. The outlook revision reflects S&P's expectation that Qualcomm's operating performance will improve in fiscal 2020 and 2021 as the 5G transition ramps up, resulting in "solid" cash flow generation and adjusted leverage below the one-times area. Further, the rating agency said at the time that it believes management's commitment to a "conservative" financial policy and "modest" shareholder returns and acquisitions should enable Qualcomm to maintain credit metrics over time.
General Motors
+0.13 (+0.38%)
Apple
+2.63 (+0.82%)
Qorvo
+2.32 (+2.15%)
Skyworks
+1.35 (+1.14%)
Qualcomm
+0.87 (+0.98%)