Qualcomm announces Q4 earnings: rakes in $4.12 billion in revenue

The Qualcomm juggernaut just keeps on rolling. As the company's financial year comes to a close it's celebrating yet another stellar quarter, reporting $4.12 billion in revenue -- up 39-percent from the same time last year and a dramatic 14-percent higher than its Q3 earnings. Of that incoming green, $1.06 was profit. For the year as a whole, Qualcomm saw profits rise 31-percent over 2010 to $4.26 billion while revenues were 36-percent higher than last year, reaching $14.96 billion. Qualcomm exceed expectations not only for earnings but also sales -- moving 127 million MSM chips in Q4, when analysts were estimating between 120 and 125 million units sold. You'll find some PR after the break but, for all the pretty financial charts you'll have to hit up the source.

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Qualcomm Announces Fourth Quarter and Fiscal 2011 Results

SAN DIEGO, Nov. 2, 2011 /PRNewswire-FirstCall/ -- Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies, products and services, today announced results for the fourth fiscal quarter and year ended September 25, 2011.

"I am very pleased with our performance this year as we delivered record revenues, earnings and MSM chipset shipments, driven by the popularity of smartphones, continued adoption of 3G technologies, particularly in emerging regions, and our industry-leading patent portfolio," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "The breadth and depth of our chipset roadmap, extensive licensing program and diverse set of global partnerships position us well for strong revenue and earnings growth in fiscal 2012. We are excited about the upcoming commercial launch of our groundbreaking Snapdragon multimode LTE solution and continue to invest in and execute on our strategic priorities to drive profitable growth."

GAAP Results

Qualcomm results are reported in accordance with generally accepted accounting principles (GAAP).

Fourth Quarter Fiscal 2011

Revenues:(1) $4.12 billion, up 39 percent year-over-year (y-o-y) and 14 percent sequentially.
Operating income:(1) $1.24 billion, up 29 percent y-o-y and 11 percent sequentially.
Net income:(2) $1.06 billion, up 22 percent y-o-y and 2 percent sequentially.
Diluted earnings per share:(2) $0.62, up 17 percent y-o-y and 2 percent sequentially.
Effective tax rate:(1) 20 percent for the quarter.
Operating cash flow: $1.82 billion, up 67 percent y-o-y; 44 percent of revenues.
Return of capital to stockholders: $361 million, or $0.215 per share, of cash dividends paid and $142 million to repurchase 2.9 million shares of our common stock.


(1)


The results of FLO TV are presented as discontinued operations, and prior period amounts have been adjusted accordingly. Revenues, operating expenses, operating income, earnings before tax (EBT) and effective tax rate throughout this news release are from continuing operations (i.e., before discontinued operations and the adjustment for noncontrolling interests), unless otherwise stated.


(2)


Net income and diluted earnings per share throughout this news release are attributable to Qualcomm (i.e., after discontinued operations and adjustment for noncontrolling interests), unless otherwise stated.




Fiscal 2011

Revenues: $14.96 billion, up 36 percent y-o-y.
Operating income: $5.03 billion, up 35 percent y-o-y.
Net income: $4.26 billion, up 31 percent y-o-y.
Diluted earnings per share: $2.52, up 29 percent y-o-y.
Effective tax rate: 20 percent.
Operating cash flow: $4.90 billion, up 20 percent y-o-y; 33 percent of revenues.
Return of capital to stockholders: $1.49 billion, including $1.35 billion, or $0.81 per share, of cash dividends paid, and $142 million to repurchase 2.9 million shares of our common stock.


Non-GAAP Results

Non-GAAP results exclude the Qualcomm Strategic Initiatives (QSI) segment, certain share-based compensation, certain tax items that are not related to the current year and certain acquisition-related items. Starting with acquisitions completed in the third quarter of fiscal 2011, we changed our methodology for reporting Non-GAAP results to exclude the recognition of the step-up of inventories to fair value and amortization of certain intangible assets, in addition to our historical practice of excluding acquired in-process research and development (R&D) expense.

Fourth Quarter Fiscal 2011

Revenues: $4.12 billion, up 39 percent y-o-y and 14 percent sequentially.
Operating income: $1.62 billion, up 44 percent y-o-y and 17 percent sequentially.
Net income: $1.37 billion, up 24 percent y-o-y and 11 percent sequentially.
Diluted earnings per share: $0.80, up 18 percent y-o-y and 10 percent sequentially. The current quarter excludes $0.01 loss per share attributable to the QSI segment, $0.12 loss per share attributable to certain share-based compensation, $0.07 loss per share attributable to certain acquisition-related items and $0.02 earnings per share attributable to certain tax-related items.
Effective tax rate: 21 percent for the quarter.
Free cash flow (defined as net cash from operating activities less capital expenditures): $1.69 billion, up 52 percent y-o-y; 41 percent of revenues.


Fiscal 2011

Revenues: $14.96 billion, up 36 percent y-o-y.
Operating income: $6.08 billion, up 41 percent y-o-y.
Net income: $5.41 billion, up 33 percent y-o-y.
Diluted earnings per share: $3.20, up 30 percent y-o-y. The current fiscal year excludes $0.23 loss per share attributable to the QSI segment, $0.37 loss per share attributable to certain share-based compensation, $0.12 loss per share attributable to certain acquisition-related items and $0.04 earnings per share attributable to certain tax-related items.
Effective tax rate: 21 percent.
Free cash flow: $4.83 billion, up 16 percent y-o-y; 32 percent of revenues.


Detailed reconciliations between results reported in accordance with generally accepted accounting principles (GAAP) and Non-GAAP results are included at the end of this news release.

In the year-over-year comparisons summarized above, the following should be noted: fiscal 2011 results included $401 million in revenues related to prior quarters as a result of agreements entered into with two licensees to settle disputes in the second quarter of fiscal 2011 and $120 million in impairment charges related to our Firethorn division, including $114 million in goodwill impairment; and fiscal 2011 operating and free cash flow reflect the impact of a $1.5 billion income tax payment primarily related to the 2008 license and settlement agreements with Nokia. In addition, fiscal 2011 results included the results of Qualcomm Atheros, Inc., which was acquired on May 24, 2011.

Key Business Metrics

Fourth Quarter Fiscal 2011

CDMA-based Mobile Station Modem (MSM®) shipments: 127 million units, up 14 percent y-o-y and 6 percent sequentially.
June quarter total reported device sales: approximately $39.1 billion, up 38 percent y-o-y and 7 percent sequentially.
June quarter estimated CDMA-based device shipments: approximately 187 to 191 million units, at an estimated average selling price of approximately $204 to $210 per unit.


Fiscal 2011

CDMA-based MSM shipments: 483 million units, up 21 percent y-o-y.
Total reported device sales: approximately $149.5 billion, up 41 percent y-o-y.
Estimated CDMA-based device shipments: approximately 717 to 734 million units, at an estimated average selling price of approximately $203 to $209 per unit.


Cash and Marketable Securities

Our cash, cash equivalents and marketable securities totaled $20.9 billion at the end of the fourth quarter of fiscal 2011, compared to $20.2 billion at the end of the third quarter of fiscal 2011 and $18.4 billion a year ago. As of September 25, 2011, $1.0 billion remained authorized for repurchases under our stock repurchase program, net of put options outstanding. In addition to the $142 million in stock repurchases we made during the fourth quarter of fiscal 2011, we repurchased and retired 2.0 million shares of our common stock for approximately $99 million since September 25, 2011. In connection with our stock repurchase program, we sold three put options which, if exercised, will require us to repurchase an additional 11.8 million shares for $586 million. On October 11, 2011, we announced a cash dividend of $0.215 per share payable on December 21, 2011 to stockholders of record as of November 23, 2011.