QTL, Smartphone Expectations Key for Qualcomm (QCOM) into Q1 Report - Analyst

January 28, 2014 11:58 AM EST
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Price: $149.80 -0.79%

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    29 Buy, 18 Hold, 3 Sell

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Cowen and Company retains an Outperform rating and $86 price target on Qualcomm (Nasdaq: QCOM) heading into the company's FQ114 report, which is set for January 29th, after the close of trading.

Analyst Timothy Arcuri is modeling revenue and EPS of $6.8 billion and $1.21, respectively. He noted that this is at the high-end of Qualcomm's previous guidance and compares favorably with consensus estimates calling for revs of $6.7 billion and EPS of $1.20. Chipset shipments are estimated around 205 million units, which takes into account a 5 percent gain in global market share to 40 percent through calendar 2014. We model QCT OpM up ~90bps in F1Q:14 due to some flow-through of cost cutting, the analyst said.

Key points for investors on the call will include:

1. Margin update and inflection expectations for QCT;

2. Guidance on QCT relative to recent commentary from Samsung and Apple (Nasdaq: AAPL);

3. What the potential impact might be if China Mobile (NYSE: CHL) commences a mix-shift away from 5 + 10;

4. ASP guidance for QTL;

5. Market outlook given reports of smartphone weakness by OEMs in calendar Q413; and

6. An update on capital return plans, execution.

For FQ214, Arcuri is looking at EPS and revs of $1.30 and $7.0 billion, respectively, which compares with consensus EPS expectations of $1.26 and revs of $6.7 billion.

For an analyst ratings summary and ratings history on Qualcomm click here. For more ratings news on Qualcomm click here.

Qualcomm closed at $73.20 yesterday, with a 52 week range of $59.02 - $74.98.


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