Cristiano Amon, president of Qualcomm and Qualcomm CDMA Technologies, answers a question during a roundtable on 5G wireless broadband technology during CES 2018 in Las Vegas, Nevada, USA, on January 10, 2018.
Steve Marcus | Reuters
Qualcomm reported first-quarter earnings after Wednesday.
Adjusted earnings exceeded expectations, but Qualcomm sales were slightly lower than expected by Wall Street, causing shares to fall above 7% in extended transactions.
This is how Qualcomm did, compared to Refinitiv’s consensus estimates:
- Earnings: $ 2.17 per share, adjusted, against an estimated $ 2.10
- Income: $ 8.23 billion, adjusted, against an estimated $ 8.227 billion
Sales increased 63% year-on-year, while profits grew 119%.
Both revenue and earnings showed strong year-on-year growth, as Qualcomm’s business has been driven by smartphones that adopt 5G, which require its chips and intellectual property, as well as an electronic boom during the pandemic. .
Qualcomm said it plans to make sales of $ 7.2 billion to $ 8 billion in the current quarter, a stronger forecast than analysts tracking the planned actions.
Late last year, Qualcomm said it planned to change the way it reports on its business segments to separate sales of phone chips, radio frequency, automotive and the Internet of Things. These business units were previously reported together in Qualcomm’s “QCT” segment.
Chip sales grew strongly, Qualcomm revealed on Wednesday, driven by 79% year-over-year growth in cell phone chips to $ 4.222 billion in the quarter ended December. Its RF front-end chips, which Qualcomm considers strategically important and used for 5G along with Qualcomm modems, rose 157% year-on-year.
Qualcomm’s business is closely tied to new phones that use 5G chips. Qualcomm expects high single-digit growth in phones to be shipped in 2021, with 450 to 550 million 5G devices reaching the shelves during the period. Qualcomm began providing 5G modems for Apple iPhones last fall.
In total, Qualcomm’s chip division, QCT, recorded sales in the quarter that rose 81% year-over-year.
In Qualcomm’s QTL licensing division, which drives much of the San Diego company’s profits, sales rose 18% year-over-year to $ 1.666 billion. However, Qualcomm’s sales forecast for its licensing division is between $ 1.25 million and $ 1.45 million, below analysts’ expectations of $ 1.432 billion.
In January, Qualcomm said it planned to buy Nuvia, a chip startup founded by Apple veterans, for $ 1.4 billion to bolster the technology it uses for its smartphones, laptops and car chips. Qualcomm said it expects to spend $ 190 million on R&D and sales, general and administrative expenses related to the purchase this year, of which $ 90 million is stock-based compensation.
Wednesday’s report is the chip maker’s first since it announced last month that CEO Steve Mollenkopf will retire later this year and will be replaced by the company’s current president, Cristiano Amon. Mollenkopf’s retirement comes after seven difficult years, which included legal issues with Apple, the Federal Trade Commission and a hostile attempt to acquire Broadcom.