Qualcomm CEO Cristiano Amon responds to a query throughout a keynote dialog at CES 2024, an annual client electronics commerce present, in Las Vegas, Nevada, on Jan. 10, 2024.
Steve Marcus | Reuters
Qualcomm reported fiscal second-quarter earnings on Wednesday that surpassed Wall Avenue expectations, and offered a robust information for the present quarter.
Shares rose about 4% in prolonged buying and selling.
This is the way it did versus LSEG consensus estimates for the quarter ended March 24:
- Earnings per share: $2.44 adjusted vs. $2.32 anticipated
- Income: $9.39 billion adjusted vs. $9.34 billion anticipated
Internet earnings throughout the quarter was $2.33 billion, or $2.06 per share, versus $1.7 billion, or $1.52 per share, within the year-earlier interval.
Qualcomm mentioned it anticipated between $8.8 billion and $9.6 billion in gross sales within the present quarter, greater than Wall Avenue expectations of $9.05 billion. Analysts had been searching for earnings steering of $2.17 per share, versus the corporate’s forecast of between $2.15 and $2.35.
The corporate mentioned on the earnings name that it anticipated total handset revenues to say no throughout the present quarter by “mid-single digit p.c” due to an absence of summer time smartphone launches, which is a typical seasonal sample.
Qualcomm’s most vital enterprise is its handsets enterprise. It sells processors, modems and different components for smartphones — primarily Android gadgets, but in addition some modem components in iPhones.
Handset gross sales rose 1% yr over yr to $6.18 billion, signaling that the smartphone market could also be recovering after a couple of years of post-Covid slumping. Qualcomm referred to as out sturdy demand for “premium tier” smartphones that require essentially the most superior chips, particularly in China. It mentioned quarterly income from Chinese language cellphone makers jumped 40% from the year-earlier interval.
“Now we have not seen indicators of weak point within the Android premium market in China,” Qualcomm CEO Cristiano Amon mentioned on an earnings name with analysts. “A number of the energy is de facto coming from premium gadgets on Oppo, OnePlus, Vivo.”
Qualcomm calls the telephones that use its greatest chips “AI-powered smartphones,” citing options resembling generative e mail completion, dwell translation, and digital assistants that use the chips specialised “NPU” AI part. One such cellphone is Samsung’s Galaxy S24 Extremely, which launched earlier this yr.
“We’re seeing the very first situations of on-device AI and Gen AI being launched in premium gadgets and that’s resonating properly with the patron,” Amon mentioned, including that the corporate is concentrating on efficiency per watt as its main synthetic intelligence benchmark.
The corporate’s automotive enterprise, which sells chips to automakers, additionally confirmed indicators of progress, rising 35% yr over yr to $603 million. Qualcomm mentioned it anticipated consecutive double digit share progress within the division within the present quarter. Income in the “Web of Issues” enterprise — lower-cost chips and chips for digital actuality — declined 11% yr over yr to $1.24 billion.
These three enterprise traces are reported collectively as QCT, the corporate’s chip enterprise, which noticed a 1% year-over-year gross sales improve to $8.03 billion.
The corporate’s licensing enterprise, QTL, through which it collects charges from firms that need to combine 5G or mobile expertise into their merchandise, elevated 2% to $1.32 billion from the year-earlier interval.
Qualcomm mentioned it paid $895 million in dividends and repurchased $731 million in shares throughout the quarter, and raised its quarterly dividend to 85 cents from 80 cents beforehand.
