Qualcomm Posts Q1 Returns

SAN DIEGO -- Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies, products and services, today announced record results for the first quarter of fiscal 2011 ended December 26, 2010.

"We are very pleased to report record revenues, earnings per share and MSM chipset shipments this quarter driven by increased demand for smartphones and data-centric devices across an expanding number of regions and price points," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "In addition, we have resolved one of our previously disclosed licensee disputes, which will be reflected beginning with the second fiscal quarter results. We continue to execute on our strategic objectives as our partners leverage our technologies and solutions to offer leading wireless products and services to consumers around the globe. We believe we are uniquely positioned to benefit from these industry trends and are substantially raising our revenue and earnings guidance for the fiscal year."

First Quarter Results (GAAP)

• Revenues: $3.35 billion, up 25 percent year-over-year (y-o-y) and 13 percent sequentially.
• Operating income: $1.11 billion, up 26 percent y-o-y and 33 percent sequentially.
• Net income: $1.17 billion, up 39 percent y-o-y and 35 percent sequentially.
• Diluted earnings per share: $0.71, up 42 percent y-o-y and 34 percent sequentially.
• Effective tax rate: 12 percent for the quarter.
• Operating cash flow: $48 million, down 96 percent y-o-y due to a $1.5 billion income tax payment.*
• Return of capital to stockholders: $309 million, or $0.19 per share, of cash dividends paid.

Non-GAAP First Quarter Results

Non-GAAP results exclude the Qualcomm Strategic Initiatives (QSI) segment, certain share-based compensation, certain tax items that are not related to the current year and acquired in-process research and development (R&D) expense.

• Revenues: $3.35 billion, up 25 percent y-o-y and 13 percent sequentially.
• Operating income: $1.42 billion, up 25 percent both y-o-y and sequentially.
• Net income: $1.35 billion, up 29 percent y-o-y and 22 percent sequentially.
• Diluted earnings per share: $0.82, up 32 percent y-o-y and 21 percent sequentially. The current quarter excludes $0.05 loss per share attributable to the QSI segment, $0.07 loss per share attributable to certain share-based compensation and $0.02 earnings per share attributable to certain tax items (the sum of Non-GAAP earnings per share and items excluded do not equal GAAP earnings per share due to rounding).
• Effective tax rate: 19 percent for the quarter.
• Free cash flow: $127 million, down 90 percent y-o-y due to a $1.5 billion income tax payment* (defined as net cash from operating activities less capital expenditures).

*The $1.5 billion income tax payment primarily related to the 2008 license and settlement agreements with Nokia.

Qualcomm Inc. (Nasdaq: QCOM)