Qualcomm jumps on better-than-feared Q4 results and guidance; unveils buyback plan

Investing.com -- Qualcomm (NASDAQ:QCOM ) delivered better-than-expected guidance following fiscal fourth-quarter results that topped Wall Street estimates and chipmaker announced a new $15 billion stock buyback program as smartphone chip demand improved.

Qualcomm jumped 7% in premarket trading Thursday.

Qualcomm reported adjusted earnings per diluted share of $2.69 on revenue of $10.24B, beating Wall Street estimates for adjusted EPS of $2.56 on revenue of $9.9B. 

The stronger-than-expected results were driven stronger performance in the company's handset chip unit, which saw sales rise 12% versus the year-ago period to $6.10B. 

Automotive chip sales, meanwhile, surged 68% to $899M in Q4 from a year earlier, while revenue from Qualcomm's Internet-of-Things unit rose 22% to $1.68B.

For fiscal Q1, the company forecast adjusted EPS of $2.85 to $3.05 on revenue of $10.5B to $11.3B, or $10.9B at the midpoint, compared with estimates for $2.87 and  $10.61B, respectively. 

"Results and outlook were likely much better than feared given recent peer reports, probably due to the company’s over-indexing to high end/flagship handsets which seem to be holding up better, as well as an adjacency story that really seems to be coming into its own," Bernstein analysts commented.

The firm maintained an Outperform rating and lifted the target price from $200 to $215. 

Meanwhile, Deutsche Bank (ETR:DBKGn ) analysts said while there is near-term upside in QCOM shares, there "remain significant outstanding questions around March quarter seasonality, ongoing Apple (NASDAQ:AAPL ) insourcing debate dynamics, pending ARM litigation, and more.

As such, the investment bank reiterated a Hold rating and a price target of $170 as it awaits updates on broader picture dynamics at Qualcomm's upcoming analyst meeting on Nov. 19. 

Yasin Ebrahim contributed to this report. 

Source: Investing.com