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Qualcomm CEO Cristiano Amon answers a question during a keynote talk at CES 2024, an annual consumer electronics trade show, on January 10, 2024 in Las Vegas, Nevada.
Steve Marcus | reuters
Qualcomm Fiscal first-quarter results reported Wednesday topped analysts’ estimates as sales of handset chips rose 16% from a year earlier. Qualcomm shares fell more than 1% in extended trading.
Here’s how the chipmaker performed for the quarter ended Dec. 24, in line with consensus expectations from LSEG, formerly known as Refinitiv:
- earnings per share: $2.75 adjusted vs. $2.37 expected
- Income: $9.92 billion adjusted vs. $9.51 billion expected
For the current quarter, Qualcomm said it expects adjusted earnings between $1.73 and $1.93 per share on revenue of $8.9 billion to $9.7 billion. Consensus expectations were for earnings of $2.25 per share on revenue of $9.3 billion, according to LSEG.
Net income during the quarter rose 24% to $2.77 billion, or $2.48 per share, from $2.24 billion, or $1.98 per share, a year earlier.
Qualcomm is best known for making smartphone chips – both the modems that connect them to cellular networks, as well as the processors at the heart of high-end Android devices.
Under CEO Cristiano Amon, Qualcomm is working to apply its chip technology to markets beyond smartphones, including PCs, cars and virtual reality headsets. But it is still a major smartphone supplier as the global market has declined over the past two years.
Qualcomm said it shipped $6.69 billion worth of handset chips during the December quarter, up 16% year over year, a positive sign for the smartphone market after two years of decline. Qualcomm said it expects global handset sales to remain stable year over year.
“We see the Android market stabilizing after 2023,” Amon said. “That was a year of improvement.”
Notably, Samsung’s high-end Galaxy phones launched in January use Qualcomm processors, and the company expects this business to continue for several years under a new deal, eliminating the possibility that That the second-largest smartphone maker will ditch Qualcomm for its own chips.
Qualcomm’s Internet of Things business includes chips meta Uses in your virtual reality headsets. Sales in that segment fell 32% to $1.13 billion.
Qualcomm is betting heavily on selling chips to automakers and car suppliers, but it’s a process that will take years because car parts have a long “qualification” cycle due to regulations and industry needs. QCT, part of Qualcomm’s budding automotive business, reported sales of $589 million, up 31% year-on-year.
QCT, the company’s chip sales business that includes automotive, Internet of Things and handsets, totaled $8.42 billion in revenue during the quarter, up 7% year-over-year.
The company’s profitable licensing business, QTL, reported revenues of $1.46 billion, an annual decline of 4%. Amon told this on a call to analysts Apple Had agreed to extend its patent licensing agreement till March 2027.
Qualcomm said it spent $800 million on share repurchases and $900 million on dividends during the quarter.
