Tech stock under pressure: QUALCOMM, Inc. (NASDAQ: QCOM)

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QUALCOMM, Inc. (NASDAQ: QCOM) stock fell over 2% in the pre-market session of Feb 6th, 2020 (as of 7:47 am GMT-5 ; Source: Google finance)  after the company posted better than expected results for the first quarter of FY 20 and forecast second-quarter revenue largely above Wall Street estimates. The outperformance in the first quarter was on the back of strength in QCT across 5G, RF front-end and adjacent platforms with revenues of $3.6 billion and EBT margin of 13%, which was above the high end of the company’s guidance range.

Meanwhile, the company has now signed over 80 5G license agreements, which is up from 75 license agreements last November. Very recently the company has signed extensions with two key Chinese OEMs through the end of March as the company is working to complete long-term 5G license agreements. Further, more than 45 OEMs have launched or announced commercial 5G devices, many of which are using QCOM’s Snapdragon 5G platforms. The company has recently introduced the flagship Snapdragon 865 mobile platform, which the company anticipates to power many premium tier Android smartphones this year.

3d illustration of a glowing blue Qualcomm logo sitting on top of a glossy microchip

QCOM in the first quarter of FY 20 has reported the adjusted earnings per share of 99 cents, beating the analysts’ estimates for the adjusted earnings per share of 85 cents, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 5 percent to $5.08 billion in the first quarter of FY 20, beating the analysts’ estimates for revenue of $4.83 billion. Qualcomm, which generates most of its profits by licensing its technology to mobile phone makers and others, said that QTL has delivered the revenue of $1.40 billion in the first quarter, compared to estimates of $1.41 billion, according to FactSet.

Additionally, the company had returned approximately $1.5 billion to stockholders during the first quarter, consisting of $710 million in dividends and $762 million in stock repurchases.

For the second quarter ending in April, Qualcomm expects its per-share earnings to be in the range of 80 cents to 95 cents. The company expects the revenue to be in the range of $4.9 billion to $5.7 billion for the fiscal second quarter while the analysts surveyed by Zacks had expected revenue of $5.1 billion. In QCT, the company expect second fiscal quarter revenues to be in the range of $3.9 billion to $4.5 billion and EBT margin to range between 15% and 17%.

For CY 2020, the company expects 1.75 to 1.85 billion devices, including 175 to 225 million 5G devices

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