Qualcomm Shares Pop After Company Reports Earnings Beat, 56% Rise in Smartphone Chip Sales

Steve Marcus | Reuters
  • Qualcomm's earnings and revenue beat Wall Street expectations. Its chip sales for smartphones were up 56% year over year.
  • Qualcomm also offered strong guidance for the current quarter, which ends in December.
  • This suggests that Qualcomm is weathering the global chip shortage that has affected other chipmakers and customers.

Qualcomm stock rose more than 6% at one point in extended trading Wednesday after the company reported its fiscal fourth-quarter earnings, which exceeded analyst expectations.

Qualcomm's revenue also beat Wall Street expectations, driven by a 56% year-over-year boost in smartphone chip sales despite a global chip shortage.

Here's how Qualcomm did versus Refinitiv consensus expectations:

  • EPS: $2.55, adjusted, vs. $2.26 expected, up 76% year over year
  • Revenue: $9.3 billion, adjusted, vs. $8.86 billion expected, up 43% year over year.

Qualcomm said it expected between $10 billion and $10.8 billion in sales in the current quarter, higher than the $9.68 billion expected by analysts.

QCT, Qualcomm's chip business, reported $7.7 billion in revenue, up 56% year over year. The company attributed the growth to strong demand for chips for smartphones and handsets.

The growth in Qualcomm's chip division comes amid problems with the supply of many semiconductors needed to build computers and other devices. It shows Qualcomm has weathered the global shortage — which has hurt companies such as Intel, AMD and Apple — and that its strategy of using multiple chip factories, or foundries, has resulted in a stronger pipeline of chip supply.

Qualcomm's IoT business, which produces low-power chips to connect other devices to the internet and is part of QCT, grew 66% to $1.5 billion. RF front-end chips, which are required to connect to 5G networks, grew 45% to $1.24 billion.

The category with the second-strongest growth in the quarter ending in December is the company's handset business, with $4.69 billion in sales. Qualcomm expects to provide chips for as many as 550 million 5G smartphones in 2022, a slight downward revision from its previous prediction.

Qualcomm's automotive business remains the company's smallest product category for chips. It grew 44% to $270 million, although the company announced several partnerships with automakers such as GM during the quarter.

QTL, the company's profitable technology licensing division, was up only 3% on an annual basis, to $1.55 billion in sales.

Qualcomm said it repurchased $1.54 billion of its own shares during the quarter and paid $768 million in dividends.

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