Qualcomm Crushes Wall Street Q3 Expectations; Operating Income Surges 19%

San Diego, California-based chip-maker Qualcomm, Inc QCOM released its fiscal third-quarter earnings results on Wednesday after the closing bell. The company's earnings and revenue came in well ahead of Wall Street consensus expectations, sending the shares around 5 percent higher in the after hours session to $58.44 at last check. Qualcomm reported adjusted earnings of $1.7 billion and operating income of $2.0 billion. Operating income was up a whopping 19 percent year over year and earnings per share jumped 17 percent to $1.16. Ahead of the report, twenty-three analysts had a consensus earnings per share estimate of $0.97. The high estimate on the Street was $1.01 and the low estimate was $0.93, so Qualcomm crushed Street expectations for its fiscal Q3 earnings. In the year-ago-period, Qualcomm reported EPS of $0.99. Revenues came in at $6 billion, representing an increase of 3 percent versus last year's third-quarter sales figures. The consensus revenue estimate for the quarter was $5.58 billion with a high estimate of $5.74 billion and a low estimate of $5.45 billion. In last year's corresponding period, QCOM reported sales of $5.83 billion, so the Street was looking for a year over year decline in sales of 4.40 percent. Instead, revenue climbed 3 percent and came in ahead of even the high Street estimate. "We delivered strong results this quarter, with EPS well ahead of our guidance based on meaningful progress with licensees in China," said Steve Mollenkopf, CEO of Qualcomm Incorporated. "Our chipset business is also benefiting from a strong new product ramp across tiers, particularly with fast growing OEMs in China. We are executing well on our strategic priorities, and we remain confident that our focused investments in 5G and other advanced technologies will create a strong foundation for long-term earnings growth." During Wednesday's trading session, QCOM climbed just under 1 percent to around $55.60 minutes before the closing bell. The stock rallied throughout much of the afternoon and closed the day near its highs suggesting that some investors were acquiring shares in anticipation of better-than-expected results. Qualcomm has been outpacing the broader market in 2016, gaining more than 11 percent versus a gain of slightly better than 6 percent for the S&P 500. The NASDAQ 100, which is the appropriate benchmark for QCOM, has added only around 1.4 percent so far in 2016. On a 52-week basis, however, the story is quite different for the company's stock price, with shares falling more than 13 percent over the last year. In fact, the stock price has fallen sharply from its 10-year high just above $80 which was hit in the summer of 2014.