Qualcomm reported revenue of $5.8B for its third fiscal quarter of 2015, down 14% from $6.8B for the same period a year ago. Net income (GAAP) was $1.2B, down 47% from $2.2B for the same period a year ago. Revenues, MSM chip shipments and EPS were within prior expectations.
Qualcomm also announced a strategic realignment plan designed “to improve execution, enhance financial performance and drive profitable growth.”
The company outlined the following core elements of the new plan:
- Aggressively right-sizing the cost structure by eliminating approximately $1.4 billion in spending, including an approximately $300 million reduction in annual share-based compensation grants; the 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.
“We are making fundamental changes to position Qualcomm for improved execution, financial and operating performance,” said Steve Mollenkopf, CEO of Qualcomm Incorporated. “We are right-sizing our cost structure and focusing our investments around the highest return opportunities while reaffirming our intent to return significant capital to stockholders and refreshing our Board of Directors. Importantly, our Strategic Realignment Plan is designed to drive meaningful change in the near term – without jeopardizing our ability to retain and build upon our technology leadership position and create long-term value for our stockholders.”
