Qualcomm Announces Third Quarter Fiscal 2010 Results

Revenues $2.7 Billion, EPS $0.47

Pro Forma EPS $0.57

Reports Record MSM Shipments; Raises Financial Guidance

SAN DIEGO -- Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies, products and services, announced results for the third quarter of fiscal 2010 ended June 27, 2010.

"Our financial performance this quarter exceeded our prior expectations, driven by record MSM chipset shipments, favorable product mix and continued strong demand for 3G devices around the world," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "Looking forward, we continue to see healthy CDMA-based device growth of approximately 23 percent in calendar year 2010, and are raising both our revenue and earnings guidance for the fiscal year."

Third Quarter Results (GAAP)

* Revenues: $2.71 billion, down 2 percent year-over-year and up 2 percent sequentially.
* Operating income: $792 million, down 11 percent year-over-year and up 2 percent sequentially.
* Net income: $767 million, up 4 percent year-over-year and down 1 percent sequentially.
* Diluted earnings per share: $0.47, up 7 percent year-over-year and 2 percent sequentially.
* Effective tax rate: 21 percent for the quarter.
* Operating cash flow: $951 million, down 13 percent year-over-year; 35 percent of revenues.
* Return of capital to stockholders: $1.49 billion, including $309 million, or $0.19 per share, of cash dividends paid, and $1.18 billion to repurchase 32.4 million shares of our common stock.


Pro Forma Third Quarter Results

Pro forma results exclude the Qualcomm Strategic Initiatives (QSI) segment, certain share-based compensation, certain tax items that are not related to the current year and acquired in-process research and development (R&D) expense.

* Revenues: $2.70 billion, down 2 percent year-over-year and up 1 percent sequentially.
* Operating income: $991 million, down 12 percent year-over-year and 7 percent sequentially.
* Net income: $936 million, up 4 percent year-over-year and down 5 percent sequentially.
* Diluted earnings per share: $0.57, up 6 percent year-over-year and down 3 percent sequentially. The current quarter excludes $0.07 loss per share attributable to certain share-based compensation and $0.03 loss per share attributable to certain tax items.
* Effective tax rate: 19 percent for the quarter.
* Free cash flow: $954 million, down 8 percent year-over-year; 35 percent of revenues (defined as net cash from operating activities less capital expenditures).


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

Third Quarter Key Business Metrics

* CDMA-based Mobile Station Modem� (MSM�) shipments: approximately 103 million units, up 10 percent year-over-year and 11 percent sequentially.
* March quarter total reported device sales: approximately $25.2 billion, up 19 percent year-over-year and down 9 percent sequentially.
o March quarter estimated CDMA-based device shipments: approximately 134 to 138 million units at an estimated average selling price of approximately $183 to $189 per unit.

Click to read the full press release