Qualcomm CEO Cristiano Amon answers questions during a keynote address at CES 2024, the annual consumer electronics trade show to be held in Las Vegas, Nevada, on January 10, 2024.
Steve Marcus | Reuters
Qualcomm announced its first-quarter results on Wednesday, with sales of mobile phone chips up 16% from a year earlier, beating analyst expectations. Qualcomm shares fell more than 1% in after-hours trading.
According to LSEG (formerly known as Refinitiv) consensus estimates, the company’s results for the quarter ending December 24 are as follows:
- Earnings per share: Adjusted $2.75, projected $2.37
- revenue: Adjusted $9.92 billion, projected $9.51 billion.
For the current quarter, Qualcomm said it expects adjusted earnings per share to be between $1.73 and $1.93 and revenue between $8.9 billion and $9.7 billion. Consensus estimates were for earnings of $2.25 a share on revenue of $9.3 billion, according to LSEG.
Net income for the quarter was $2.77 billion, or $2.48 per share, an increase of 24% from $2.24 billion, or $1.98 per share, in the year-ago period.
Qualcomm is best known for making chips that are both the modems that connect smartphones to cellular networks and the processors that are at the heart of high-end Android devices.
Under CEO Cristiano Amon, Qualcomm has been working to apply its chip technology to markets other than smartphones, such as PCs, cars and virtual reality headsets. However, the company remains a major smartphone supplier due to the global market downturn over the past two years.
Qualcomm said it shipped $6.69 billion in mobile phone chips in the December quarter, up 16% year-on-year, a positive sign for the smartphone market. After two years of decline. Qualcomm said it expects global device sales to be flat compared to the previous year.
“We see the Android market stabilizing after 2023,” Amon said. “It was a year of revision.”
Notably, Qualcomm’s processors are used in the high-end Galaxy phones that Samsung launched in January, and the company expects that business to continue for several years under the new deal, making it the second-largest smartphone. He foresees the possibility that manufacturers will avoid Qualcomm by developing their own chips.
Qualcomm’s Internet of Things business includes chips Meta It’s used in the company’s virtual reality headsets. The segment’s sales fell 32% to $1.13 billion.
Qualcomm is betting big on selling chips to automakers and auto suppliers, a process that takes years due to long “certification” cycles for auto parts due to regulations and industry needs. Qualcomm’s nascent automotive business, part of QCT, reported revenue of $589 million, up 31% on an annual basis.
QCT, the company’s chip sales business that includes automotive, Internet of Things and mobile phones, had total revenue of $8.42 billion in the quarter, up 7% on an annual basis.
The company’s profitable licensing business, QTL, reported revenue of $1.46 billion, down 4% for the year. Amon told analysts on a conference call: apple had agreed to extend the patent license agreement until March 2027.
Qualcomm said it spent $800 million on stock buybacks and $900 million on dividends during the quarter.
