Voya Financial (VOYA) Q3 Earnings and Revenues Top Estimates


Trading 39% from its highs, all eyes will be on Qualcomm’s QCOM fiscal Q4 earnings release on November 2. Investors will get the first glimpse of how the largest semiconductor companies are handling high inflation with NVIDIA NVDA and others set to report later this month.

The report will show the broader demand for Qualcomm’s integrated circuits (ICs) and the need for its Code Division Multiple Access Technology (CDMA). CDMA is an example of Qualcomm being an innovation leader in designing, manufacturing, and marketing digital wireless telecom products. QCOM’s stock is still holding up better than broader markets over the last year despite a lackluster YTD performance.

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Qualcomm’s business is largely derived from selling processors and modems for smartphones. Last quarter, the company’s handset business grew 59% year over year to $6.15 billion. Qualcomm reported total revenue of $10.93 billion, which was also up 37% year over year. This helped QCOM beat earnings expectations by 3% at $2.96 per share, up 53% year over year.

Despite the beats on both its top and bottom lines last quarter, the stock was slightly down after earnings. The decline was due to the company offering weak guidance for its fiscal Q4 amid what it already stated was a challenging macroeconomic environment.

Fiscal Q4 Outlook

The Zacks Consensus Estimate for QCOM’s fiscal Q4 earnings is $3.15 per share, which would represent a 23% increase from Q4 2021. Sales are expected to be up 22% at $11.38 billion. Earnings estimates for the period have remained unchanged throughout the quarter.

Year over year, QCOM earnings are expected to climb 47% and rise another 1% in FY23 at $12.66 per share. Top line growth is expected as well, with sales projected to be up 31% this year and rise another 5% in FY23 to $46.55 billion.

However, full-year earnings estimates for the current year, next quarter, and FY23 have declined over the last 90 days. In addition to earnings, Wall Street will certainly be paying close attention to Qualcomm’s FY23 guidance as the current market environment is still tougher on technology companies. 

Performance & Valuation

Year to date QCOM is down -36% to underperform the S&P 500’s -20% and closer to the Nasdaq’s -30%. Longer-term investors are hoping QCOM can get back to its strong performance with the stock crushing the benchmark and the Nasdaq over the last five years. This is especially true when adding QCOM’s solid dividend yield for the stock’s total return.

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After reaching 52-week highs of $193.58 last January QCOM’s stock has plummeted to $117 per share. At current levels, QCOM has a P/E of 10.3X. This is well below its peer group’s 24.7X. The stock also trades at a discount to its decade-high of 36.9X and the median of 16.5X.

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Bottom Line

Despite trading at a discount relative to its past, QCOM currently lands a Zacks Rank #4 (Sell) in correlation to declining earnings estimates for this year, next quarter, and FY23. Although Qualcomm’s Wireless Equipment Industry is in the top 16% of over 250 Zacks Industries, investors will want to pay close attention to the company’s outlook and guidance because of the downward revisions.

Long-term the stock is starting to look attractive, but more short-term pain could be ahead considering the current chip and tech headwinds.

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