Qualcomm, much like Apple, has just reported their Q1 2014 results. Their first fiscal quarter of 2014 is the three months ending on December 29th, 2013. Qualcomm actually posted some really good results, even if some did fall below expectations. The chip maker pulled in about $6.62 Billion in revenue, which is lower than the $6.68 billion expected. Earnings per share was at $1.26, which is a big higher than the projected $1.18 per share.
Comparing these numbers to Q1 2013, Revenues are up 10% year-over-year. Operating income was $1.49 billion, down 28% year-over-year. Qualcomm’s Net Income was $1.88 billion, down 2% year-over-year. Diluted earnings per share was $1.09, down 2% year-over-year. Operating cash flow was $2.78 billion an increase of 41% year-over-year. Finally, return of capital to stockholders is $1.59 billion, including $1.00 billion through repurchases of 14.2 million shares of common stock and $590 million, or $0.35 per share, of cash dividends paid.
This shows us that the industry demand for high-end chips is starting to decrease as the market is beginning to be saturated for high-end devices. In the meantime, demand for lower-end devices is increasing. Which is probably why Qualcomm announced a few new lower-end processors earlier this month. According to JMP Securities analyst Alex Gauna, “Apple had everybody prepared for things moving in the wrong direction and they [Qualcomm] didn’t.” He went on to say “Apple is not the only customer out there. We’re starting to see the Samsung and LGs of tomorrow emerging out of China.”
To me, these earnings look pretty good. They definitely look better than what HTC or Motorola have been reporting lately. But then again I’m not an analyst. Qualcomm’s Chairman Paul Jacobs did say that he was thrilled to start off their fiscal year with record revenues. Qualcomm can probably attribute much of these numbers to Samsung. As Samsung has been using more Qualcomm chips than their own chips as of late, due to LTE.
How do you think Qualcomm will fair this year? Do they have anything to worry about from NVIDIA, Samsung/Exynos or MediaTek?