Qualcomm Announces Second Quarter Fiscal 2013 Results
Revenues $6.1 Billion
GAAP EPS $1.06, Non-GAAP EPS $1.17
- Record Quarterly Revenues; Raising Fiscal 2013 Guidance -
SAN DIEGO, April 24, 2013 /PRNewswire-FirstCall/ -- Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies, products and services, today announced results for the second quarter of fiscal 2013 ended March 31, 2013.
"We delivered another strong quarter as the worldwide adoption of smartphones continues," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "Looking forward, we are seeing strong traction with our new Qualcomm Snapdragon 600 and 800 processors, and we continue to expect healthy growth in 3G and 3G/4G multimode devices around the world. We are pleased to be raising our calendar 2013 3G/4G device shipment estimates and our revenue and earnings guidance for fiscal 2013."
Second Quarter Results (GAAP)
Revenues: 1 $6.12 billion, up 24 percent year-over-year (y-o-y) and 2 percent sequentially.
Operating income: 1 $1.88 billion, up 24 percent y-o-y and down 10 percent sequentially.
Net income: 2 $1.87 billion, down 16 percent y-o-y* and 2 percent sequentially.
Diluted earnings per share: 2 $1.06, down 17 percent y-o-y* and 3 percent sequentially.
Effective tax rate: 1 13 percent for the quarter.
Operating cash flow: $2.22 billion, up 17 percent y-o-y; 36 percent of revenues.
Return of capital to stockholders: $431 million, or $0.25 per share, of cash dividends paid.
* The second quarter of fiscal 2012 GAAP results included $761 million, net of income taxes, or $0.44 per share, for discontinued operations as a result of a $1.2 billion pre-tax gain associated with the sale of substantially all of our 700 MHz spectrum.
1 Throughout this news release, fiscal 2012 results for FLO TV are presented as discontinued operations. Revenues, operating expenses, operating income, earnings before tax (EBT) and effective tax rates are from continuing operations (i.e., before adjustments for noncontrolling interests and, for fiscal 2012, discontinued operations), unless otherwise stated.
2 Throughout this news release, net income and diluted earnings per share are attributable to Qualcomm (i.e., after adjustments for noncontrolling interests and discontinued operations), unless otherwise stated.
Non-GAAP Second Quarter Results
Non-GAAP results exclude the QSI segment and certain share-based compensation, acquisition-related items and tax items.
Revenues: $6.12 billion, up 24 percent y-o-y and 2 percent sequentially.
Operating income: $2.23 billion, up 18 percent y-o-y and down 9 percent sequentially.
Net income: $2.07 billion, up 17 percent y-o-y and down 6 percent sequentially.
Diluted earnings per share: $1.17, up 16 percent y-o-y and down 7 percent sequentially.
Effective tax rate: 16 percent for the quarter.
Free cash flow (defined as net cash from operating activities less capital expenditures): $1.99 billion, up 10 percent y-o-y; 33 percent of revenues.
Detailed reconciliations between results reported in accordance with generally accepted accounting principles (GAAP) and Non-GAAP results are included within this news release.
Second Quarter Key Business Metrics
MSM™ chip shipments: 173 million units, up 14 percent y-o-y and down 5 percent sequentially.
December quarter total reported device sales: approximately $61.1 billion, up 18 percent y-o-y and 15 percent sequentially.
December quarter estimated 3G/4G device shipments: approximately 279 to 283 million units, at an estimated average selling price of approximately $214 to $220 per unit.
Cash and Marketable Securities
Our cash, cash equivalents and marketable securities totaled $30.5 billion at the end of the second quarter of fiscal 2013, compared to $26.6 billion a year ago and $28.4 billion at the end of the first quarter of fiscal 2013. On April 9, 2013, we announced a cash dividend of $0.35 per share payable on June 26, 2013 to stockholders of record as of June 5, 2013, which represents a 40 percent increase over our prior quarterly dividend.
Research and Development
N/M - Not Meaningful
Non-GAAP research and development (R&D) expenses increased 28 percent y-o-y primarily due to an increase in costs related to the development of CDMA-based 3G, OFDMA-based 4G LTE and other technologies for integrated circuit and related software products and to expand our intellectual property portfolio.
Selling, General and Administrative
N/M - Not Meaningful
Non-GAAP selling, general and administrative (SG&A) expenses increased 14 percent y-o-y primarily due to increases in employee-related expenses, patent-related expenses and selling and marketing expenses.
Effective Income Tax Rates
Our fiscal 2013 annual effective income tax rates are estimated to be approximately 16 percent for GAAP and approximately 17 to 18 percent for Non-GAAP. The second quarter effective income tax rates were 13 percent for GAAP and 16 percent for Non-GAAP, which are lower than the estimated annual effective tax rates primarily as a result of the retroactive reinstatement of the federal R&D tax credit during the second quarter. The federal R&D tax credit benefit that related to fiscal 2012 of $0.04 per share was excluded from Non-GAAP results.
QSI makes strategic investments, many of which are in early-stage companies, and holds wireless spectrum. GAAP results for the second quarter of fiscal 2013 included $0.02 earnings per share for QSI.
The following statements are forward looking, and actual results may differ materially. The "Note Regarding Forward-Looking Statements" in this news release provides a description of certain risks that we face, and our annual and quarterly reports on file with the Securities and Exchange Commission (SEC) provide a more complete description of risks.
Our outlook does not include provisions for future asset impairments or for pending legal matters, other than future legal amounts that are probable and estimable. Further, due to their nature, certain income and expense items, such as realized investment and certain derivative gains or losses, cannot be accurately forecast. Accordingly, we only include such items in our business outlook to the extent they are reasonably certain; however, actual results may vary materially from the business outlook.
The following table summarizes GAAP and Non-GAAP guidance based on the current business outlook. The Non-GAAP business outlook presented below is consistent with the presentation of Non-GAAP results included elsewhere herein.