Do Qualcomm Earnings Matter? Here's What The Street Thinks

• QUALCOMM, Inc. QCOM is scheduled to announce its first quarter fiscal 2016 financial results after the market closes on Wednesday.
• According to Estimize, the Street is modeling consensus earnings of $0.90 per share, down 32 percent year-over-year, on revenue of $5.697 billion, down almost 20 percent.

JPMorgan

Earlier this week, JPMorgan's Rod Hall shared a preview of Qualcomm's results and reiterated an Overweight rating.

The analysts believe the company bought back its stock aggressively over the quarter and this will help earnings by roughly 2 percent. They expect earnings to come in at $0.91 per share, with revenue at $5.7 billion.

The analysts pointed out two issues they will be focused on: cost control and margin trajectory for fiscal 2016.

Other figures previewed in the report included:

• QCT EBT margins of 10.2 percent, versus guidance of 10 percent.
• QCT chipments of 236 million, versus guidance of 225 million to 245 million.
• QTL TRDS of $56.7 billion, versus guidance of $50 billion to $58 billion.

Susquehanna

This week, analysts Chris Caso and Liz Pate upgraded their rating on Qualcomm from Neutral to Positive, boosting their price target from $53.00 to $60.00, noting that some China issues that worried them (like uncertainty around royalties) were mostly resolved.

For the first quarter of fiscal 2016, the firm is projecting earnings of $0.90 per share on revenue of $5.68 billion, in line with the company’s December EPS guidance.

Nomura

Nomura analysts recently issued a Neutral rating and $55 price target on Qualcomm. The analysts believe “a clean quarter and solid guide is a necessary first step to getting more constructive on Qualcomm” and noted that forward estimates have been falling for more than 12 months.

Nonetheless, smartphone demand seems weak and the Street is expecting “better than seasonal growth for the March period.”

Management preannounced positive EPS, at or above the high end of its guidance ($0.80–$0.90), citing “lower costs and higher ASPs and units in the QTL business.”

Brean Capital

A couple of weeks ago, Brean's Mike Burton reiterated a Buy rating on Qualcomm, following the announcement of its joint venture with TDK Epcos – which is expected to close next year. The expert recommended buying the stock on the dips, but did not share a preview of the 2016 results.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.