QCOM: Earnings Tonight, Our Quick Take

by Dan February 1, 2012 3:23 pm • Commentary

QCOM ($59.50) No Trade here but thought would give some thoughts as we have gotten some questions: company reports their fiscal Q1 tonight after the bell……the implied move in the options market is about 5%, which is slightly rich to the 4 qtr avg move of about 4.475%.

-Given BRCM‘s q1 guidance last night and the stock’s reaction it (up 8% today) is a bit difficult to step in front of this report on the short side…..

-I guess the thing that sticks out to me like a sore thumb is the long term chart (below)…….. $60 is a huge level for the stock and level it has not been able to get through on 3 occasions in the last year, BUT backing the chart out a bit, it hasnt been above $60 since June 2000………. since the internet bubble burst, if you can remember that long ago.

QCOM chart via Bloomberg


MY QUICK TAKE: It’s a very tough call here, especially when you consider some of the guidance that we have seen from some of its peers and some of the handset results we have seen from the likes of AAPL and Samsung…..BUT it will take  some huge guidance to get through $60 in my opinion…..The street is overwhelmingly positive on the name with 36 Buys, 7 Holds and NO Sells, while short interest is a mere 1% of the float.

Obviously there is a lot of good news in the stock at current levels and a lot of enthusiastic investors hoping for a break-out.


Bloomberg’s Preview:  PREVIEW Qualcomm 1Q: May See 1Q, 2Q Upside; Watch Shipments

By Sarah Gill
Feb. 1 (Bloomberg) — Qualcomm expected to report 1Q today

• QCOM saw 2012 CDMA-based device shipments 865m-935m on Nov. 2
• Saw FY12 CDMA-based ASP $197-$209
• FY12 adj. EPS est. $3.59 ($3.38-$3.75), saw $3.42-$3.62,
• FY12 rev. est. $18.5b ($17.3b-$19b), saw $18b-$19b
• 1Q adj. EPS est. 90c (88c-97c), saw 86c-92c
• 1Q rev. est. $4.58b ($4.44b-$4.84b), saw $4.35b-$4.75b
• Saw 1Q MSM shipments 146m-154m
• 2Q adj. EPS est. 89c (84c-95c)
• 2Q rev. est. $4.5b ($4.3b-$4.9b)

• QCOM may report shipments at high end of seasonally high range based on prelim. smartphone data from Sony Ericsson, IDC: JPMorgan, Feb. 1
• Beat, raise qtr likely on Apple led smartphone growth, share gains at RIM, Nokia; QCOM may report results at or above high end of forecast range: Piper Jaffray, Feb. 1
• QCOM trading at 16x RBC’s CY12 est. EPS, inline with large cap peer group; Apple, Samsung gaining shr from basically everyone else, positive for QCOM: RBC, Jan. 30

• QCOM has beaten EPS last 8 qtrs, sales 7 of last 8, shrs have fallen day after 3 of last 8 qtrs
• QCOM up 9.1% YTD vs SPX up 5.7%

• QCOM has reported earnings at 4pm last 4 qtrs
• Call 4:45pm 866-566-8589 pw 41343500 or http://bit.ly/wEPsti