Apple, Samsung Could Be To Blame For Qualcomm's Light Guidance

Tim Long of BMO Capital commented in a report that QUALCOMM, Inc.'s (NASDAQ: QCOM) fourth quarter earnings print was better than expected, but guidance into December was "slightly weaker."

Qualcomm earned $1.28 per share in the quarter on revenue of $6.2 billion, which exceeded Long's estimates of $1.10 per share and revenue of $5.9 billion. However, the upside in revenue was based on a catch-up royalty payments and slightly lower chip revenues.

Looking forward to the fiscal first quarter, Qualcomm guided its earnings per share to fall in a range of $1.12 to $1.22 on revenue of $5.7 billion to $6.5 billion. The analyst was modeling for the company to earn $1.22 per share on revenue of $6.2 billion.

Long said Qualcomm's forward looking guidance was light and could be attributed to more share loss at Apple Inc. (NASDAQ: AAPL) along with the well known issues with Samsung's Note 7. As a whole, the analyst is modeling Qualcomm to lose about 700 basis points of market share in fiscal 2017 followed by another 200 basis points in fiscal 2018.

"We remain concerned about the secular growth of the core market, but expect the stock to stay in a trading range given the pending acquisition of NXP Semiconductors NV (NASDAQ: NXPI)," Long stated.