* Reports 4Q 2019 results on Wednesday, Nov. 6, after the market close
* Revenue Expectation: $4.75 billion
* EPS Expectation: $0.71
Qualcomm (NASDAQ:QCOM) stock has soared 30% since late May, having plunged more than 16% in the five months before that. This dramatic turnaround strongly suggests investors are optimistic about the chipmaker, hopeful it’s seen the worst in the current down cycle and that the next phase will bring a rebound in demand. Whether the San Diego-based company delivers on these expectations is, however, not yet guaranteed.
For its fiscal fourth-quarter earnings report, scheduled to be released tomorrow, Chief Executive Officer Steve Mollenkopf has already warned of a drastic slowdown in sales, hurt by slowing demand from mobile-phone makers who are the company’s largest customers.
Phone makers are holding off on releasing new high-end phones based on current technology and consumers are delaying their purchases until the debut of fifth generation, or 5G, cellular services, Mollenkopf said in July, adding that this temporary lull will hurt the company’s near-term revenue outlook.
For the quarter that ended on Sept. 30, Qualcomm expects sales in the range of $4.3 billion to $5.1 billion. The forecast projects a decline in sales of 12% to 26% from the period a year earlier.
But the price action in Qualcomm’s shares during the past few months implies that investors are looking beyond the fourth-quarter and focusing on the positive developments that favor buying Qualcomm stock when it’s trading low. The shares rose 1.8% yesterday, to close at $85.09, having gained 3.5% during Friday’s session.