Qualcomm President and CEO Cristiano Amon talks about Qualcomm’s digital chassis for automakers at a press conference at CES 2022 in Las Vegas, Nevada, on January 4, 2022.
Steve Marcus | Reuters
Qualcomm reported second-quarter earnings after the clock on Wednesday, beating Wall Street’s expectations for sales and earnings and driving the stock up over 4% in extended trading.
Here’s how Qualcomm fared in relation to Refinitive’s consensus expectations:
- EPS: $ 3.21, adjusted, versus $ 2.91 expected, a 69% year-over-year increase
- Income: $ 11.16 billion, adjusted over the expected $ 10.60 billion, an increase of 41% year-on-year
- QCT (chip sales): USD 9.55 billion against USD 8.86 expected per. StreetAccount, an increase of 52% year-on-year
- QTL (Technology License): USD 1.58 billion against USD 1.55 expected per StreetAccount, a decrease of 2% year-on-year
Qualcomm said it expected between $ 2.75 and $ 2.95 in third-quarter earnings per share of about $ 10.9 billion in sales. The company’s forecast is stronger than the $ 9.98 billion sales guidance that Wall Street expected.
Qualcomm makes most of its money selling processors and modems for smartphones and through licensing technology to connect to mobile networks. Its strong results on Wednesday come amid a broader market skepticism towards chip companies in 2022, which benefited from strong demand and limited supply during the Covid-19 pandemic.
Under CEO Cristiano Amon, Qualcomm has stressed to investors that it can be a chip provider for many additional markets and can diversify away from its bread and butter handset chip business.
All four of Qualcomm’s major chip markets grew during the quarter ending in March.
Handset, the largest market for Qualcomm chips, grew 56% year-on-year to $ 6.33 billion, suggesting that a potential slowdown in smartphone sales in an inflationary environment has not yet hit the primary Android chip maker.
RF front-end, a company that focuses on selling a part that enables 5G connections, grew 28% to $ 1.16 billion.
The car market segment remains small in terms of sales today, but the company remains optimistic that it is striking partnerships with car manufacturers and suppliers that will lead to more growth. Qualcomm reported $ 339 million in car sales, an increase of 41% annually. Revenue from Veoneer was not included in the March quarter, although Qualcomm closes the acquisition in the current quarter.
The IoT company, which makes low-energy and cheap chips, reported a growth of 61% to 1.72 billion.
Qualcomm said it paid $ 764 million in cash dividends and repurchased $ 951 million of its shares during the quarter.