QUALCOMM Inc. (QCOM) continues to boast strong fundamentals that signal growth, and analysts keep raising forecasts. Wall Street is projecting earnings of 51 cents per share for the fiscal fourth quarter, up from last month’s 50 cents. For the year ending September 2008, analysts are expecting earnings of $1.95 per share, versus last month’s $1.94. The most accurate estimate is a more bullish $2.02. The company is scheduled to report results for the fourth quarter and full year in early November.

Company Description

QUALCOMM Incorporated designs, manufactures and markets digital wireless telecommunications products and services.

An Update on Growth

After our initial coverage of QCOM, in early July, the company enjoyed a bullish run. Techs have sold off a bit since then, resulting in a slide in QCOM’s share price. The company’s fundamentals, however, remain intact and continue to signal growth. Even with the recent share drop, QCOM remains ahead of the major averages over the past year. In fact, the lower share price may be an opportunity to get in on this wireless telecommunications play, which offers solid growth and income.

On July 23, the company posted a strong fiscal third quarter, noting that it delivered record revenues that were up by 19 % year-over-year.

Bullish Forecasts

On July 24, Qualcomm announced its outlook, which included a fourth-quarter guidance of about 49 to 51 cents per share.

Analysts are projecting earnings of 51 cents per share for the fiscal fourth quarter, up from last month’s 50 cents.

For the year ending September 2008, analysts are expecting earnings of $1.95 per share, versus last month’s $1.94. The most accurate estimate is a more bullish $2.02.

For the following year, the consensus estimate notched up a penny over the past week to $2.36 per share.

The company is scheduled to report results for the fourth quarter and full year in early November.

Favorable Industry Comparisons

The company’s return on equity (ROE) of 20% is well above the industry average of 2%. Its yield of 1.3% stands out as the company operates in an industry that virtually pays no dividend. QCOM’s earnings per share are expected to grow by 19% over the next 3 – 5 years, versus the industry average of 17%.

Content Courtesy: Zacks Investment Research

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