Qualcomm reported earnings in the first quarter after the bell on Wednesday.
Adjusted earnings exceeded expectations but Qualcomm’s sales were slightly lower than Wall Street’s expectations, putting the stock down more than 7% in extended trading.
Here’s what Qualcomm did, compared to Refinitiv’s consensus estimates:
- Earnings: $ 2.17 per share, adjusted, compared to an estimated $ 2.10
- Income: $ 8.23 billion, adjusted, compared to an estimated $ 8.27 billion
Sales were up 63% year over year while earnings were growing 119%.
Both revenue and earnings showed strong year-over-year growth as Qualcomm’s smartphone-driven business embraced 5G, requiring its chips and intellectual property, as well as electronic surges during the year. pandemic.
Qualcomm said it plans for between $ 7.2 billion and $ 8 billion in sales in the current quarter, a stronger forecast than analysts monitoring the expected stock. However, Qualcomm ‘s forecasts for its licensing division are between $ 1.25 billion and $ 1.45 billion in the current quarter, slightly soft compared to analysts’ expectations of $ 1.43 billion.
Late last year, Qualcomm said it planned to change the way it reports its business segments to break sales from mobile, radio frequency, automation and internet of things. These business units were previously reported together in Qualcomm’s “QCT” division.
Chip sales grew strongly, Qualcomm revealed Wednesday, led by 79% year-over-year growth in handheld chips to $ 4.22 billion in the quarter ended December. Its RF front-end chips, which Qualcomm sees as strategically important and used for 5G in conjunction with Qualcomm modems, rose 157% year-over-year.
Qualcomm’s business is closely tied to new handsets that use 5G chips. Qualcomm expects high single-digit growth in phones installed in fiscal 2021, with between 450 million and 550 million 5G devices hitting shelves during that period. Qualcomm started rolling out 5G modems for Apple iPhones last fall.
Overall, Qualcomm’s chip division, QCT, reported sales in the quarter that were up 81% year-over-year.
Qualcomm’s QTL licensing division, which drives much of San Diego’s company profit, sold up 18% year-over-year to $ 1.66 billion.
In January, Qualcomm said it planned to buy Nuvia, a chip starter set up by Apple veterans, for $ 1.4 billion to support the technology it uses for its smartphone, laptop and car chips. Qualcomm said it planned to spend $ 190 million on R&D and sales, general and administrative costs associated with the purchase this year, of which $ 90 million is share-based compensation.
Wednesday’s report is the first from the chipmaker since it announced last month that CEO Steve Mollenkopf will resign later this year and that a current president will company, Cristiano Amon, in his place. Mollenkopf’s retirement comes after seven challenging years, which included legal issues with Apple, the Federal Trade Commission and a hostile infectious effort from Broadcom.