Qualcomm beats by $0.04, reports revs in-line; guides Q4 EPS below consensus, revs below consensus; Announces Strategic Realignment Plan
Reports Q3 (Jun) earnings of $0.99 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.95; revenues fell 14.3% year/year to $5.83 bln vs the $5.85 bln consensus. Co issues downside guidance for Q4, sees EPS of $0.75-0.95 vs. $1.08 Capital IQ Consensus Estimate; sees Q4 revs of $4.7-5.7 bln vs. $6.13 bln Capital IQ Consensus Estimate.
Co has initiated a Strategic Realignment Plan designed to improve execution, enhance financial performance and drive profitable growth
* QCOM also announced that it has entered into an agreement with JANA Partners pursuant to which Mark McLaughlin and Tony Vinciquerra have been added to the Board of Directors and a third director to be selected by the Company and consented to by JANA will be added promptly.
The core elements of the new plan include:
- Aggressively right-sizing the cost structure by eliminating approx $1.4 bln in spending, including an approx $300 mln reduction in annual share-based compensation grants; Company expects to achieve this run-rate by the end of fiscal year 2016
- Reviewing alternatives to the Company's corporate and financial structure
- Reaffirming the Company's plan to return significant capital to stockholders
- Adding new Directors with complementary skills while reducing the average tenure of the Board of Directors
- Further aligning executive compensation with performance, including returns on investment
- Disciplined investment in areas that further Qualcomm's leadership positions, build upon the Company's core technologies and capabilities and offer attractive growth opportunities and returns