NASDAQ$QCOM

Qualcomm Inc · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Qualcomm's earnings exceeded the high end of guidance, resolved a dispute with Huawei, and signed a new license agreement.

Qualcomm announced its Q3 fiscal year 2020 results, which showed revenues of $4.9 billion and GAAP EPS of $0.74. The company resolved its dispute with Huawei and signed a new long-term patent license agreement.

  • Earnings exceeded the high end of the guidance range.
  • Dispute with Huawei was resolved, and a new license agreement was signed.
  • 5G rollout benefits are being realized.
  • The company is well-positioned for the balance of 2020 and beyond.

Headline financials

Total Revenue

$4.89B

Previous: $9.64B-49.2%
EPS (adj)

$0.86

Previous: $0.80+7.5%
Free Cash Flow

$845M

Previous: $2.15B-60.7%
Net Income

$845M

Previous: $2.15B-60.7%
Operating Income

$782M

Previous: $5.32B-85.3%
Gross Profit

$2.81B

Previous: $7.52B-62.6%
Cash & Equivalents

$6.12B

Previous: $13.9B-56.0%
Total Assets

$32.3B

Previous: $34.1B-5.3%
Stock-Based Comp

$296M

Previous: $246M+20.3%

Revenue & EPS history

Qualcomm · Revenue · Quarterly

$4.89B

Q3 2020-49.2%vs Q3 2019
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Revenue by segment

Qualcomm · $11.3B total across 2 segments · Q4 2022

  • QCT
    $9.9B
  • QTL
    $1.44B

Forward guidance

Qualcomm's financial guidance for the fourth quarter of fiscal 2020 includes estimated QTL revenues for royalties due on sales made by Huawei and estimated revenues of approximately $1.8 billion related to amounts due from Huawei under the settlement agreement and the new global patent license agreement.

Tailwinds

  • Estimated QTL revenues for royalties due on sales made by Huawei in the September 2020 quarter.
  • Estimated revenues of approximately $1.8 billion related to amounts due from Huawei under the settlement agreement
  • Amounts due for the March 2020 and June 2020 quarters under the new global patent license agreement
  • Q4 FY20 Non-GAAP Revenues $5.5B - $6.3B
  • Q4 FY20 Non-GAAP diluted EPS $1.05 - $1.25

Headwinds

  • Guidance includes an impact of greater than ($0.25) to EPS attributable to a planning assumption of an approximate 15% year-over-year reduction in handset shipments due to COVID-19
  • Partial impact from the delay of a global 5G flagship phone launch.
  • Challenging economic environment and highly uncertain effects of COVID-19.
  • Q4 FY20 GAAP Revenues $7.3B - $8.1B Less revenues attributable to other items ~$1.8B
  • Q4 FY20 GAAP diluted EPS $2.12 - $2.32 Less diluted EPS attributable to other items $1.31

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

-0.5%

Avg return

Earnings day

+1.4%

Avg return

5 days after

+4.4%

Avg return

30 days after

47%

34 / 73 earnings

Positive

+17.2%

Q3 2020

Best reaction

-16.1%

Q4 2015

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q2 2026-1.9%+19.6%+60.9%
Q1 2026-8.5%-5.9%-8.9%
Q4 2025+0.7%-3.2%-2.7%
Q3 2025-7.7%-7.8%+1.0%
Q2 2025-8.9%-5.8%-2.2%
Q1 2025-3.7%-2.2%-8.3%
Q4 2024+4.2%+1.4%-3.9%
Q3 2024-1.8%-5.4%+5.0%
Q2 2024+8.6%+9.6%+23.0%
Q1 2024-3.3%-1.3%+11.7%
Q4 2023+7.7%+10.0%+19.0%
Q3 2023-10.1%-9.6%-12.6%
Q2 2023-8.2%-6.7%-0.4%
Q1 2023-2.5%-1.3%-10.7%
Q4 2022-11.5%-6.2%+7.1%
Q3 2022-2.3%-1.7%-7.7%
Q2 2022+11.0%+8.8%+4.7%
Q1 2022+1.1%-1.2%-8.4%
Q4 2021+15.4%+22.6%+30.5%
Q3 2021+7.1%+5.6%+2.8%
Q2 2021+3.4%-0.4%-2.5%
Q1 2021-10.2%-10.6%-21.3%
Q4 2020+15.9%+13.7%+25.6%
Q3 2020+17.2%+19.8%+29.3%
Q2 2020+4.5%+0.5%+7.4%
Q1 2020+1.9%-0.4%-12.9%
Q4 2019+5.3%+7.5%-1.9%
Q3 2019-4.8%-8.0%+4.0%
Q2 2019+1.2%+2.5%-22.4%
Q1 2019+0.2%+0.6%+9.7%
Q4 2018-8.8%-14.4%-12.0%
Q3 2018+8.0%+5.4%+14.1%
Q2 2018+1.1%+2.1%+20.1%
Q1 2018-0.3%-7.9%-3.4%
Q4 2017+7.5%+22.6%+28.4%
Q3 2017-4.1%-5.5%-7.8%
Q2 2017-0.0%+0.3%+9.5%
Q1 2017-1.7%-2.5%+4.0%
Q4 2016-2.0%+0.2%-3.7%
Q3 2016+8.7%+10.1%+13.8%
Q2 2016-0.3%
Q1 2016-10.2%
Q4 2015-16.1%
Q3 2015-5.2%
Q2 2015-0.3%
Q1 2015-11.3%
Q4 2014-8.5%
Q3 2014-6.6%
Q2 2014-3.4%
Q1 2014+1.8%
Q4 2013-2.8%
Q3 2013+1.8%
Q2 2013-4.5%
Q1 2013+4.1%
Q4 2012+0.5%
Q4 2011+0.5%
Q3 2012+7.3%
Q2 2012-6.9%
Q1 2012+3.2%
Q3 2011-0.1%
Q2 2011+6.6%
Q1 2011+0.3%
Q4 2010+6.5%
Q3 2010+6.4%
Q2 2010-9.1%
Q2 2009-13.7%
Q1 2009-13.7%
Q1 2010+0.3%
Q4 2007+5.5%
Q4 2009+5.5%
Q3 2008-1.2%
Q4 2008-1.2%
Q3 2009-1.2%

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