Qualcomm's Gamble: Gotham-Sized Profits or Joker's Last Laugh?

The Numbers Game: Notches Above

Another night another set of numbers. Qualcomm's Q2 earnings landed like a batarang hitting $2.85 per share adjusted against the $2.82 expected. Revenue? $10.84 billion a sliver above the predicted $10.66 billion. These villains in Gotham's accounting department try to fool around with the numbers. As I said 'It's not who I am underneath but what I do that defines me.' and the same for the Numbers it is not the values but what they do for the company that define them.

Forecasts and Foreboding: The Shadow Knows

But here's where the signal gets a bit scrambled. The current quarter forecast? A midpoint of $2.70 adjusted earnings per share on $10.3 billion revenue. Analysts were sniffing around $2.67 on $10.35 billion. A slight down tick. It's like the Joker planning his next scheme – you know something's coming but you can't quite put your finger on it. Time to investigate...and prepare.

Net Gains: A Victory for the Balance Sheet

Net income soared to $2.81 billion or $2.52 per share compared to last year's $2.33 billion or $2.06 per share. Even Alfred would approve of those figures. "Sometimes the truth isn't good enough sometimes people deserve more. Sometimes people deserve to have their faith rewarded." That's what Qualcomm has done by increasing Net Income.

Global Supply Chain: The Ace in the Hole

Qualcomm's CFO Akash Palkhiwala assures us they've got a 'very diversified global supply chain.' Translation: they're not putting all their chips in one basket unlike some villains I know. CEO Cristiano Amon added that they are not inexperienced dealing with uncertainty. 'As a wise man once said everything burns!' So they are well prepared.

Beyond Smartphones: The Diversification Play

Here's where things get interesting. Handset chip sales are up 12% but the real story is the push into automotive and IoT. Automotive grew a hefty 59% and IoT jumped 27%. Amon's trying to sell chips for cars VR headsets and even Windows PCs. Smart move. Losing Apple as a customer is like losing Robin – painful but you gotta adapt. Because 'Why do we fall? So we can learn to pick ourselves up.'

QCT vs. QTL: The Dynamic Duo

QCT the chip selling business rose 18%. QTL the licensing arm was flat. Classic Batman and Robin dynamic – one's growing the other's reliable. They spent $2.7 billion on capital return share repurchases and dividends they truly are 'necessary evil' and sometimes you need them.