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.
The company’s share price fell in extended trading as Qualcomm’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.
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 said that it doesn’t currently expect any material impact from tariffs, and that it had not seen elevated buying of its products ahead of tariffs during the quarter.
“One thing to remember is when you look at our supply chain, we have a very diversified global supply chain,” Qualcomm finance chief Akash Palkhiwala said on the earnings call.
“As we navigate those times, this is a company that is not inexperienced dealing with uncertainty,” Qualcomm CEO Cristiano Amon said on the call.
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%.
Amon said the company has been working to sell more chips for cars through its automotive business, more chips for other gadgets like Meta’s Quest virtual-reality headsets and more Windows PCs under Qualcomm’s 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.
“Our top priorities remain executing our diversification strategy and continuing to invest in areas that drive long-term value,” Amon said in a statement.
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 QCT chips business 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.
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.
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