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Qualcomm 2Q15 Earnings: What Investors Can Expect

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Qualcomm revenue growth slows dramatically

Qualcomm (QCOM) is expected to announce its fiscal 2Q15 earnings on April 22 after market close. The company expects revenues for the quarter to be between $6.5 billion and $7.1 billion, up 7% on a YoY (year-over-year) basis from the midpoint. Qualcomm also expects non-GAAP (generally accepted accounting principles) earnings per share to be between $1.28 and $1.40 per share, up 2% YoY from the midpoint.

The chart below shows Qualcomm YoY revenue growth in each fiscal quarter. You can see that this growth has slowed dramatically over the last few quarters—from 30%+ in fiscal 2013 to the single digits now.

This has impacted Qualcomm stock, which has declined by about 16% in the last year. The company’s peers in the chipset business have performed much better. Intel (INTC) stock has gained 20%, Texas Instruments (TXN) stock, 27%, and Broadcom (BRCM) stock has shot up by 46% over the past year.

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Issues pressuring Qualcomm stock

Qualcomm continues to face issues in China (FXI), the most important market for the company. Plus, Samsung reportedly replaced Qualcomm’s chipsets with its own chipsets in its latest Galaxy S6 smartphone, according to an April 3 report from The Wall Street Journal.

These issues have pressured Qualcomm stock, which is why it’s lagging behind its peers. To boost shareholder value, activist hedge fund Jana Partners recently suggested that Qualcomm change its corporate structure, among other things.

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