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   Technology StocksQualcomm Moderated Thread - please read rules before posting


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To: Jim Mullens who wrote (122692)11/6/2014 10:24:42 AM
From: Art Bechhoefer
   of 176493
 
Jim -- At the cc, they explained a range of revenues and earnings, depending on how things go in China. The range was dictated by what Aberle termed the difference between "global" and "reported" sales of smartphones that use QCOM IP. The decline in ASP is based on lower cost components, and in particular, the greater number of lower priced smartphones that are expected to be sold in emerging nations.

Art

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To: Art Bechhoefer who wrote (122694)11/6/2014 10:27:39 AM
From: Elroy
   of 176493
 
I suspect QCOM will be buying back shares big time today.

I don't think US public companies can buy their own shares so close to the quarterly results. Companies always talk about the open window to buy, I think they may need to wait some time (3 days??) before the can continue with their share repurchase plan.

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To: Jim Mullens who wrote (122692)11/6/2014 10:27:52 AM
From: slacker711
   of 176493
 
I don’t understand guidance… what from China is included / what is not.


The low-end of guidance assumes the current status quo. The high-end assumes that they are getting paid on some percentage of Chinese sales though I dont think they indicated how much.


+ FY15 Revenue guided up1% to 9%,


+ non-GAAP oper inc up 3 – 12%,


+ yet non-GAAP EPS down 4% to up 2%.


They said that non-GAAP tax rate is going up next year so that may account for at least some of the difference between operating income and EPS. It also gets impacted by their assumptions around the total shares outstanding.

Slacker

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To: Elroy who wrote (122696)11/6/2014 10:47:55 AM
From: The_Net
   of 176493
 
Share buy back is governed by 'Rule 10b-18'

en.wikipedia.org

http://www.investopedia.com/terms/r/rule10b18.asp
http://media.mofo.com/files/Uploads/Images/FAQ-Rule-10b-18-Stock-Repurchases.pdf

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From: blimfark11/6/2014 10:48:11 AM
   of 176493
 
Wow.... Big drop to what looks like a 52 week low. Maybe the Q can't buy, but I did by way of Jan16 65 Leaps.
Qualcomm stock price always seems to overreact to uncertainty.

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To: slacker711 who wrote (122697)11/6/2014 10:52:09 AM
From: Jim Mullens
   of 176493
 
Slacker, re: confusing FY15 guidance..................

"..They said that non-GAAP tax rate is going up next year so that may account for at least some of the difference between operating income and EPS. It also gets impacted by their assumptions around the total shares outstanding. .."

Yes, thanks.

Also, investment income plays into the calculation as some part of that due to "unknowns" is not included in guidance.

But... there's a such a big delta between non-GAAP operating income and EPS ---- 7 to 10 percentage points.

+ FY15 Revenue guided up1% to 9%,
+ non-GAAP oper inc up 3 – 12%,
+ yet non-GAAP EPS down 4% to up 2%.

Revenue / operating income at the top range is guided up 9% and 12% respectively is acceptable...** BUT** EPS **DOWN** 1% at the midpoint and 2% for the high range is very problematic IMO.

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To: Art Bechhoefer who wrote (122694)11/6/2014 11:53:56 AM
From: waitwatchwander
6 Recommendations   of 176493
 
Domestic cash dropped to $5.8B last qtr. They spend $714M on dividends each qtr. They bought back $1B in stock last qtr and are likely to repeat that this qtr. Even with last quarter's buyback shares outstanding only dropped 13M. Options are being cashed in like crazy. The buyback of stock mostly facilitates the executives of this company to steadily cash in their options. That's been going on for years and is an issue that should be addressed by the BoD.

If I remember correctly, they once stated they need a steady $4B in cash to keep the lights on.

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To: Art Bechhoefer who wrote (122690)11/6/2014 12:01:56 PM
From: gutboy09
2 Recommendations   of 176493
 
Art - you wrote: Qualcomm modem chips or designs based on these chips are found in something like 84% of all 3G-4G smartphones

So everyone is considering Qcom a monopoly. But shouldnt they realize these customers chose Qcom not the other way around. just my 2 cents.

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To: slacker711 who wrote (122697)11/6/2014 12:14:38 PM
From: waitwatchwander
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---> non-GAAP tax rate is going up next year

Could this mean they are getting ready to repatriate some of their foreign cash or does the tax rate just go up because they have fewer expenses for tax purposes? The tax rate normally averaged in the mid to low 20% area. The last couple of years it's been in the high teens which I suspect is due to the higher R&D/SG&A spend. I guess they could be just getting those line items back under control.

Did they state a number for the tax rate in 2015?

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To: waitwatchwander who wrote (122701)11/6/2014 12:18:01 PM
From: Art Bechhoefer
   of 176493
 
There are several ways to buy back shares. In the past, Qualcomm has sold put options on the shares, typically at striking prices above the going price of the shares. If the stock remains below the striking price, QCOM eventually acquires the shares at the striking price, but the net cost is the striking price minus the premium when the put options were initially sold.

So if QCOM were going to buy shares today, they need not fork up, say, a billion or so for stock purchases, but instead might simply sell put options with a striking price above the share price. I noted in an earlier comment that the data from the latest financial report suggests that share buybacks in FY'14 cost about $75 a share. They can do better this time.

Art

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