Qualcomm Smartphone Sales Suggest Recovery for Chip Business

During the quarter, Qualcomm allocated $800 million for share repurchases and $900 million for dividends. (Credits: Qualcomm)

Qualcomm released its fiscal first-quarter results on Wednesday, surpassing analysts’ expectations with a 16% increase in handset chip sales compared to the previous year. However, Qualcomm shares dipped over 1% in after-hours trading.

Here are the highlights for the quarter ending Dec. 24, based on consensus estimates from LSEG:

– Adjusted earnings per share: $2.75, exceeding the expected $2.37
– Adjusted revenue: $9.92 billion, higher than the anticipated $9.51 billion

For the current quarter, Qualcomm anticipates adjusted earnings between $1.73 and $1.93 per share on revenue ranging from $8.9 billion to $9.7 billion. Consensus estimates projected earnings of $2.25 per share on revenue of $9.3 billion.

Qualcomm (Credits: Dado Ruvic)

Quarterly net income climbed 24% to $2.77 billion, or $2.48 per share, compared to $2.24 billion, or $1.98 per share, in the previous year.

Although Qualcomm is renowned for its smartphone chips, including modems and processors for high-end Android devices, CEO Cristiano Amon has expanded the company’s focus to include markets beyond smartphones such as PCs, automobiles, and virtual reality headsets.

Despite the smartphone market’s recent decline, Qualcomm saw a 16% increase in handset chip shipments, totaling $6.69 billion during the December quarter. CEO Amon expressed optimism about the stabilization of the Android market following corrections in 2023.

QCT, Qualcomm’s chip sales business encompassing automotive, IoT, and handsets, generated $8.42 billion in revenue, marking a 7% increase year-over-year. (Credits: Qualcomm)

Qualcomm’s Internet of Things division, supplying chips for Meta’s virtual reality headsets, experienced a 32% decline in sales to $1.13 billion. However, its automotive chip sales surged by 31% to $589 million annually.

On the other hand, QTL, the licensing arm, reported a 4% annual revenue decrease, amounting to $1.46 billion. Amon disclosed that Apple had extended its patent licensing agreement with Qualcomm through March 2027.

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.