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LAS VEGAS — Qualcomm’s fiscal third-quarter earnings surpassed Wall Street predictions, delivering robust results and optimistic guidance for the upcoming quarter.
At a press conference during CES 2022, Qualcomm Chairman and CEO Cristiano Amon discussed the company’s performance. Following the earnings report, Qualcomm’s shares jumped over 6% in after-hours trading.
For the quarter ending June 23, Qualcomm’s results were as follows compared to LSEG’s consensus estimates:
- Earnings per share: $2.33 (adjusted) versus $2.25 expected
- Revenue: $9.39 billion (adjusted) compared to $9.22 billion anticipated
Net income for the quarter reached $2.13 billion, or $1.88 per share, up from $1.8 billion, or $1.60 per share, in the same period last year.
Looking ahead, Qualcomm forecasts sales of $9.5 billion to $10.3 billion for the current quarter, surpassing Wall Street’s expectation of $9.71 billion. The company projects earnings between $2.38 and $2.58 per share, while analysts had predicted $2.45.
Qualcomm’s primary revenue driver, its handset business, saw a 12% year-over-year increase in mobile phone sales, totaling $5.9 billion. This aligns with StreetAccount analysts’ estimates and suggests a recovery from the sharp decline in smartphone sales over the past two years.
The company highlights its advanced Snapdragon chips, essential for “AI smartphones” like recent Samsung models capable of generative AI tasks such as image creation.
“AI has expanded the size of the premium tier,” said CEO Cristiano Amon during a financial results call. “Even in a market with flat or low single-digit growth, the premium tier is growing faster.”
Though still a smaller segment, Qualcomm sees significant growth potential in automotive chips. Automotive revenue surged 87% year-over-year to $811 million, exceeding StreetAccount’s expectation of $641.7 million.
Qualcomm’s “Internet of Things” (IoT) division, which includes chips for cost-effective devices and Meta’s Quest headphones, saw an 8% year-over-year revenue decline to $1.4 billion, yet surpassed StreetAccount’s forecast of $641.7 million. The division also features the new Snapdragon X Elite PC chip for Windows laptops, recently launched with Microsoft.
Amon described the Snapdragon X launch as a “milestone” in Qualcomm’s diversification strategy. Collectively, the company’s chip division (QCT) achieved sales of $8.1 billion, marking a 12% increase from the previous year.
In addition to chip sales, Qualcomm collects licensing fees from companies using its 5G and other cellular technologies, reported as QTL sales. Licensing revenue grew by 3% year-over-year to $1.3 billion.
During the quarter, Qualcomm distributed $949 million in dividends and repurchased 7 million shares worth $1.3 billion.
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