Qualcomm CEO Cristiano Amon responds to a question during a keynote conversation at CES 2024, an annual consumer electronics trade show, in Las Vegas, Nevada, on Jan. 10, 2024.
Steve Marcus | Reuters
Qualcomm reported fiscal second-quarter earnings on Wednesday that topped Wall Street expectations as the company’s chip sales showed strong year-over-year growth.
Qualcomm shares fell in extended trading as the company’s revenue forecast for the current quarter was slightly lighter than expectations.
Here’s how the chipmaker did compared to Wall Street expectations, based on a survey of analysts by LSEG:
- Earnings per share: $2.85 adjusted vs. $2.82 expected
- Revenue: $10.84 billion adjusted vs. $10.66 billion expected
In the current quarter, Qualcomm said it expected $2.70 at the midpoint in adjusted earnings per share on $10.3 billion in revenue at the midpoint. Analysts polled by LSEG were looking for $2.67 in adjusted earnings on $10.35 billion in sales in the current quarter.
Net income during the quarter ending in March was $2.81 billion, or $2.52 per share, compared to $2.33 billion, or $2.06 per share, in the year-ago period. Qualcomm’s adjusted results include exclusions for acquisition-related charges, interest expenses, and share compensation.
Qualcomm’s most important business is selling chips such as modems and processors for smartphones, including high-end devices made by Samsung and Apple. Its overall handset chip sales increased 12% on an annual basis to $6.93 billion. Qualcomm’s overall adjusted revenue in the quarter rose 15%.
But under CEO Cristiano Amon, the company has been working to sell more chips for cars, reported as its automotive business, and more chips for other gadgets such as Meta’s Quest virtual reality headsets, as well as Windows PCs, under its Internet of Things business. Growth in those categories signals how well the company is diversifying away from its core handset business, which expects to lose Apple as a customer in the coming years.
Qualcomm said that its automotive business grew a 59% on an annual basis, to $959 million in sales. Its internet of things business rose 27% to $1.58 billion in revenue.
All together, Qualcomm’s business selling chips, called QCT, rose 18% on an annual basis to $9.47 billion in revenue during the quarter.
Qualcomm’s other major division is QTL, which is a profitable division that collects licensing fees from technology that Qualcomm developed and patented. QTL revenue was flat year-over-year at $1.32 billion.
Qualcomm is exposed to tariffs, export controls and shifts in demand because it designs and ships physical hardware. Amon said in a statement that Qualcomm was navigating the “current macroeconomic and trade environment.”
The company said it spent $2.7 billion on capital return during the quarter, including $1.7 billion in share repurchases and $938 million in dividends.
