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Qualcomm (NASDAQ: QCOM) Q4 profit beats estimates, guides in-line Q1

Qualcomm (NASDAQ: QCOM) swung to a profit in the fourth quarter of 2019 from a loss last year, helped by lower costs and expenses. The results exceeded analysts’ expectations. Further, the semiconductor manufacturer guided first-quarter revenue and earnings within the consensus estimates.

Net income was $506 million or $0.42 per share compared to a loss of $513 million or $0.36 per share in the previous year quarter. Adjusted earnings decreased by 12% to $0.78 per share.

Qualcomm (QCOM) Q4 2019 Earnings Review

Revenue dropped by 17% to $4.81 billion. The transition to the 5G networks has made the customers hold back on 4G services. This has made the demand for 4G services dull for the quarter.

Looking ahead into the first quarter, the company expects revenues to be in the range of $4.4 billion to $5.2 billion. Adjusted EPS is projected to be in the range of $0.80 to $0.90, down 25% to 33% year-over-year.

For the first quarter, MSM chip shipments are anticipated to decline by 11% to 22% to the range of 145 million to 165 million. QTL revenues are predicted to increase by 28% to 47% to the range of $1.3 billion to $1.5 billion. The GAAP earnings are expected to fall by 30% to 41% to the range of $0.51 to $0.61 per share.

For the fourth quarter, revenues from QCT fell by 22% to $3.61 billion due to a 34% dip in the MSM chip shipments. However, QTL revenues rose by 4% to $1.16 billion.

Read: Intel Q3 earnings review

The company said the second interim agreement with Huawei concluded in the Q3 of fiscal 2019, and although negotiations continue, Qualcomm has not reached a final agreement with Huawei.

Qualcomm expects 3G/4G/5G global device shipments in the range of 1.7-1.8 billion for the calendar 2019 and 1.75-1.85 billion for the calendar 2020. For the calendar 2020, 5G global handset shipments are anticipated to be in the range of 175-225 million.

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