Trade Alert – Earnings recap and adding to Qualcomm

Earnings season is on full blast and let’s run through last night’s reports.

First, Facebook reported another quarter of strong growth with top and bottom line both showing expansion. Mobile ads were a “bit light” according to most of the sellsider’s models, but those same estimates had been moving upward all quarter, so that makes some sense. Overall, nothing new in the report and this one looks like, as I said yesterday, there’s a lot of tech/momentum/growth money out there wanting into Facebook.

Second, Fusion-IO reported a good quarter, but guidance is pretty bad. This has been a venture-capital-esque investment for us from the beginning as I have said, meaning it comes with huge risk and huge reward potential. The topline has been the most important gauge for me to judge growth, as earnings in this early of a stage are volatile. And that’s where the real disappoint in this guidance comes — FIO’s guided to barely any topline growth for this year now. Their two largest customers, Apple and Facebook, are still spending like mad to build out their services, but FIO reported last night that both are getting even more efficiency out of their FIO products already that they’ve been able to slow the spend on that. The stock is down a couple bucks this morning and I’m not rushing out of this one, but I’m extremely disappointed in the company and myself about this. I’ve got a call into management there and will be making a final decision about what to do with FIO this weekend.

Qualcomm, on the other hand, just blew it all away. Huge results, huge guidance, huge growth ahead. This is a company that’s hitting on all cylinders in the smartphone market. The stock’s up $3.50 this morning and I think it’s headed to $80 sooner than later. I’m going to nibble on a little more common stock in this one today.