Qualcomm earnings beat estimates as smartphone chip sales suggest recovery

Qualcomm CEO Cristiano Amon responds to a query throughout a keynote dialog at CES 2024, an annual shopper electronics commerce present, in Las Vegas, Nevada, on Jan. 10, 2024.

Steve Marcus | Reuters

Qualcomm reported fiscal first-quarter outcomes on Wednesday that topped analysts’ estimates as sales of handset chips jumped 16% from a yr earlier. The inventory briefly rose virtually 3% in prolonged buying and selling earlier than falling .

Here’s how the chipmaker did for the quarter ending Dec. 24, per consensus expectations from LSEG, previously recognized as Refinitiv:

  • Earnings per share: $2.75 adjusted vs. $2.37 anticipated
  • Revenue: $9.92 billion adjusted vs. $9.51 billion anticipated

For the present quarter, Qualcomm stated it expects adjusted earnings of between $1.73 and $1.93 per share on income of $8.9 billion to $9.7 billion. Consensus expectations, based on LSEG, have been for earnings of $2.25 per share on $9.3 billion of income.

Net earnings rose 24% throughout the quarter to $2.77 billion, or $2.48 per share, from $2.24 billion, or $1.98 per share, a year in the past.

Qualcomm is best-known for making smartphone chips — each the modems that join them to mobile networks, as properly as the processors on the coronary heart of high-end Android gadgets.

Under CEO Cristiano Amon, Qualcomm has been working to use its chip know-how to markets past smartphones, together with PCs, vehicles and digital actuality headsets. But it is nonetheless a serious smartphone provider as the worldwide market has slumped over the previous two years.

Qualcomm stated it shipped $6.69 billion in handset chips throughout the December quarter, up 16% yr over yr, a optimistic signal for the smartphone market after two years of declines.

Notably, Samsung’s high-end Galaxy telephones launched in January use Qualcomm processors, and the corporate expects that enterprise to proceed for a number of years below a brand new deal, foreclosing the likelihood that the second-largest smartphone maker would eschew Qualcomm for its personal chips.

Qualcomm’s Internet of Things enterprise consists of the chips Meta makes use of in its digital actuality headsets. That section noticed sales slide 32% to $1.13 billion.

Qualcomm is betting closely on promoting chips to automakers and automobile suppliers, nevertheless it’s a course of that may take years as automobile components have an extended “qualification” cycle because of laws and the wants of the business. Qualcomm’s nascent automotive enterprise, a part of QCT, reported $589 million in sales, up 31% on an annual foundation.

QCT, the corporate’s chip sales enterprise that features automotive, Internet of Things and handsets, totaled $8.42 billion in income throughout the quarter, up 7% on an annual foundation.

The firm’s worthwhile licensing enterprise, QTL, reported $1.46 billion in income, a 4% annual decline. Amon informed analysts on a name that Apple had agreed to increase its patent licensing settlement via March 2027.

Qualcomm stated it spent $800 million in share repurchases and $900 million on dividends throughout the quarter.

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