Qualcomm stock rebounds more than 6% as handset sales drive record results and good outlook

Qualcomm stock rebounds more than 6% as handset sales drive record results and good outlook

Qualcomm stock rebounds more than 6% as handset sales drive record earnings and bright outlook

Shares of Qualcomm Inc. rallied in extended trading on Wednesday after the chipmaker’s record quarterly results and strong outlook beat Wall Street estimates and the company assured analysts that demand continues to outpace the market. ‘offer.

QCOM Qualcomm
said it expects third-quarter adjusted earnings of $2.75 to $2.95 per share on revenue of $10.5 billion to $11.3 billion, while analysts polled by FactSet said estimated $2.64 per share on revenue of $10.02 billion.

As some analysts worry that chip inventories will rise and the supply shortage will begin to end, Qualcomm chief executive Cristiano Amon dismissed those concerns in a conference call and said strong demand continues. was integrated into the orientations of the company.

“We will always have more demand than supply in all businesses,” Amon told analysts.

One of the main drivers of those sales comes from the company’s core handset business, which posted strong gains in the second quarter and which Qualcomm chief financial officer Akash Palkhiwala called in an interview with MarketWatch a so-called “mature” activity of the company.

For example, handset chip sales soared 56% to $6.34 billion from a year ago, while the Street expected $5.91 billion. Handset sales are part of Qualcomm’s CDMA, or QCT, technologies segment.

“We’re not just gaining market share, which we’ve done in particular at Samsung, where they decided to use our chip rather than their own internal chip to [their Galaxy S22 smartphone]Palkhiwala told MarketWatch. “We’re also gaining market share in terms of content…chips are getting more complex and fewer and fewer people are making those chips, and that works to our advantage.”

The company forecasts third-quarter QCT sales of $9.1 billion to $9.6 billion, and sales of Qualcomm’s technology licensing segment, or QTL, of $1.4 billion to $1.6 billion. of dollars. Analysts had forecast $8.44 billion in QCT sales and QTL revenue of $1.51 billion.

In fact, CEO Amon expects Samsung KR:005930
to continue to prefer Qualcomm’s Snapdragon chip over its own internal chip for its high-end phones.

“In many of these markets which are now new markets for Qualcomm, Samsung is actively advertising Snapdragon as an ingredient brand for the Galaxy S22,” Amon told analysts. “I think that’s a very important data point…I think we’re very confident that the relationship with Samsung will continue to be an extension relationship for us.”

Qualcomm shares rose more than 6% after hours after gaining 1.2% in the regular session to close at $135.10.

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The company reported second-quarter net income of $2.93 billion, or $2.57 per share, compared with $1.76 billion, or $1.53 per share, a year ago. The chipmaker reported adjusted earnings, which exclude stock-based compensation expense and other items, of $3.21 per share, compared with $1.90 per share a year ago. Total second-quarter revenue hit a record $11.16 billion, up from $7.94 billion a year ago.

Analysts estimated earnings of $2.95 per share, based on Qualcomm’s forecast of $2.80 to $3 per share, and revenue of $10.63 billion, based on Qualcomm’s revenue forecast. Qualcomm from $10.2 billion to $11 billion.

RF front-end sales increased 28% to $1.16 billion vs. $1.12 billion expected, auto chip sales increased 41% to $339 million vs. 282 estimate $.4 million from Street, and Internet of Things, or IoT, sales jumped 61% to $1.72. billion versus $1.61 billion Street View.

Qualcomm reported QCT revenue of $9.55 billion, a 52% gain from a year ago. Analysts had estimated $8.9 billion, based on the company’s forecast of $8.7-9.3 billion. QCT includes handsets and RF chips as well as automotive and IoT chips.

QTL segment revenue fell 2% to $1.58 billion for the first quarter, but was still above Wall Street estimates of $1.55 billion, based on a company forecast of $1.45 to $1.65 billion.

Over the past 12 months, Qualcomm shares are down 2.1%, compared to a 10.3% decline for the PHLX Semiconductor Index SOX.,
a 12% drop in the S&P 500 SPX index
and an 11.4% drop in the tech-heavy Nasdaq composite index, COMP.

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