Will Qualcomm’s (QCOM) third quarter results be strong for revenue growth?

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Qualcomm Incorporated QCOM is expected to release its results for the third quarter of fiscal 2021 on July 28, after the closing bell. In the last published quarter, the company made a surprise profit of 13.8%. It has achieved a surprise profit of 14.6% on average over the last four quarters.

The San Diego, California-based company is expected to report higher year-over-year revenue, thanks to the rise of 5G-enabled chips and the strength of its Snapdragon portfolio. The company continues to benefit from advanced radio frequency (RF) front-end solutions for high-performance 5G devices.

Factors in play

During the quarter, Qualcomm announced the launch of Snapdragon 888 Plus, an upgraded version of its flagship 5G Snapdragon mobile platform. The new SoC (System-on-Chip) is likely to deliver a premium entertainment, connectivity and gaming experience with enhanced features, attracting interest from several major handset manufacturers around the world. Taking advantage of AI capabilities, Snapdragon 888 Plus enables multiple networks to be run simultaneously for an immersive entertainment experience with noise cancellation features to remove unwanted sounds. The company also launched the Snapdragon 778G 5G mobile platform, which has been specially designed to deliver enhanced mobile gaming and video experiences through artificial intelligence technology. The solution is expected to power the next high-end smartphones from iQOO, Xiaomi, Realme, Honor, OPPO and Motorola. This should be reflected in the results to come.

In the fiscal third quarter, Qualcomm unveiled a list of leading edge IoT solutions to drive digital transformation in various industries, globally. These include seven new solutions: Qualcomm QCS8250, Qualcomm QCS6490 / QCM6490, Qualcomm QCS4290 / QCM4290 and Qualcomm QCS2290 / QCM2290. Next-generation solutions have been specifically designed to deliver advanced Edge-AI performance to meet the growing needs of the augmented IoT ecosystem for key segments such as warehousing, retail and transportation thanks to the capabilities of 5G connectivity. Qualcomm also introduced the world’s first 10 Gigabit X65 and X62 5G M.2 benchmark designs to drive adoption of 5G technology in various industry segments such as customer-premises equipment, always-on PCs and games. These innovative products likely resulted in higher revenues during the quarter.

During the quarter, Qualcomm partnered with Nokia and US Cellular to successfully field test the 5G mmWave solution in a commercial network. The test results are likely to sow the seeds for extended 5G coverage in rural areas with improved connectivity and low latency features. This follows a similar collaboration with Ericsson, US Cellular and Inseego to conduct an extended-range 5G mmWave trial to extend broadband services in rural, suburban and urban environments and eliminate connectivity issues. potentials. Such technological collaborations have probably resulted in revenue growth.

Zacks’ consensus estimate for the Qualcomm CDMA Technologies segment revenues are set at $ 6,068 million. It indicates an increase of 59.4% over the figure released a year ago. The higher projection reflects the strength of handsets and demand from adjacent platforms beyond mobile (RF front-end, automotive and IoT).

The consensus estimate for Qualcomm Technology License revenues are $ 1,460 million, indicating 39.8% year-over-year growth. The performance is likely driven by rising Huawei royalty revenue, global handset shipments, and a favorable OEM mix.

For the June quarter, Zacks’ consensus estimate for revenue is set at $ 7,535 million, indicating growth of 54% from the figure released a year ago. The consensus estimate for adjusted earnings per share is set at $ 1.67, which suggests an increase of 94.2%.

Whispers of gains

Our proven model does not predict a profit beating for Qualcomm for the third fiscal quarter. The combination of a positive earnings ESP and a Zacks # 1 (strong buy), 2 (buy), or 3 (hold) ranking increases the odds of beating the winnings. That is not the case here.

ESP on income: The PSE of earnings, which is the difference between the most accurate estimate and the Zacks consensus estimate, is -0.82%, with the former set at $ 1.66 and the latter at 1.67 $. You can discover the best stocks to buy or sell before they are flagged with our ESP Earnings Filter.

QUALCOMM Incorporated Award and EPS Surprise

QUALCOMM Incorporated price-eps-surprise | QUALCOMM Incorporated Quote

Zack Rank: Qualcomm has a rank 3 of Zacks.

Actions to consider

Here are a few companies you might want to consider, as our model shows they have the right mix of elements to show a profit beat this season:

Nokia Corporation NOK is expected to release quarterly figures on July 29. He has an earnings ESP of + 9.09% and a Zacks # 3 rank. You can see The full list of today’s Zacks # 1 Rank stocks here.

ESP gains for InterDigital, Inc. IDCC is + 38.78% and carries a Zacks rank of 3. The company is expected to release quarterly figures on August 5.

ESP gains for T-Mobile US Inc. The TMUS is + 13.75% and it carries a Zacks rank of 3. The company is expected to release quarterly figures on July 29.

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