Qualcomm Announces Second Quarter Fiscal 2015 Results

Non-GAAP results exclude the QSI (Qualcomm Strategic Initiatives) segment and certain share-based compensation, acquisition-related items, tax items and other items. Beginning in the first quarter of fiscal 2015, we changed our methodology for reporting Non-GAAP results to exclude third-party acquisition and integration services costs and certain other items, which may include major restructuring and restructuring-related costs, goodwill and long-lived asset impairment charges and litigation settlements and/or damages. Detailed reconciliations between GAAP and Non-GAAP results are included within this news release.

* The following should be considered in regards to the year-over-year and sequential comparisons:  The second quarter of fiscal 2015 GAAP results included a $975 million charge, or $0.58 per share, related to the resolution reached with the China National Development and Reform Commission (NDRC) regarding its investigation of us under China's Anti-Monopoly Law. Operating cash flow also was impacted by the prepayment of $950 million to secure long-term capacity commitments at a supplier of our integrated circuit products.



Second Quarter Key Business Metrics












Q2 Fiscal

2015


Q2 Fiscal

2014


Year-Over-
Year Change
(1)


Q1 Fiscal

2015


Sequential
Change
(1)

MSMchip shipments

233M


188M


+24%


270M


(14%)

Total reported device sales (2)

$75.8B


$66.5B


+14%


$56.4B


+34%

Est. reported 3G/4G device shipments (approx.) (2)

384M - 388M


295M - 299M


+30%


284M - 288M


+35%

Est. reported 3G/4G average selling price (approx.) (2)

$193 - $199


$221 - $227


(13%)


$194 - $200


(1%)



(1)

The midpoints of the estimated ranges are identified for comparison purposes only and do not indicate a higher degree of confidence in the midpoints.



(2)

The second quarter of fiscal 2014 and 2015 are based on sales by our licensees in the December quarter as reported to us in the March quarter, and the first quarter of fiscal 2015 is based on sales by our licensees in the September quarter as reported to us in the December quarter.



Cash and Marketable Securities

Our cash, cash equivalents and marketable securities totaled $29.6 billion at the end of the second quarter of fiscal 2015, compared to $32.1 billion a year ago and $31.6 billion at the end of the first quarter of fiscal 2015.

Return of Capital to Stockholders

During the second quarter of fiscal 2015, we returned $2.6 billion to stockholders, including $1.9 billion through repurchases of 27.8 million shares of common stock and $689 million, or $0.42 per share, of cash dividends paid. On March 9, 2015, we announced a new $15 billion stock repurchase program, including our intention to repurchase $10 billion of common stock within 12 months, in addition to our current commitment to return a minimum of 75% of free cash flow to stockholders through stock repurchases and dividends. Since March 29, 2015, we repurchased and retired 5.1 million shares of common stock for $345 million. On April 8, 2015, we announced a cash dividend of $0.48 per share payable on June 24, 2015 to stockholders of record as of the close of business on June 3, 2015, which represents a 14 percent increase over our prior quarterly dividend.

Effective Income Tax Rates

Our fiscal 2015 annual effective income tax rates are estimated to be approximately 21 percent for GAAP and approximately 19 percent for Non-GAAP, both of which include the United States federal research and development (R&D) tax credit generated through December 31, 2014, the date on which the credit expired. The effective income tax rates for the second quarter of fiscal 2015 were 32 percent for GAAP and 20 percent for Non-GAAP. Our estimated annual tax rate for GAAP increased from our prior estimate primarily as a result of the $975 million fine related to the resolution with the NDRC during the second quarter of fiscal 2015. The fine is not deductible for tax purposes and was accounted for discretely.

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