Qualcomm's stock has risen more than 6% as a consequence of record mobile sales and a positive outlook.
Qualcomm Inc. stock soared in Wednesday's extended session as the chipmaker's record quarterly earnings and upbeat outlook blew past Wall Street expectations, and the firm assured analysts that demand continues to outweigh supply.
Qualcomm QCOM, +1.20 percent said it anticipates adjusted profits of $2.75 to $2.95 per share on sales of $10.5 billion to $11.3 billion in the third quarter, compared to $2.64 per share on revenue of $10.02 billion predicted by FactSet analysts. While some analysts are worried that chip stocks are rising and the supply bottleneck is coming to an end, Qualcomm Chief Executive Cristiano Amon rejected such concerns during a conference call, saying the company's projection accounts for sustained high demand.
"Across the board, we'll still have more demand than supply," Amon told analysts.
Qualcomm's core phone business, which showed robust increases in the second quarter and which Qualcomm Chief Financial Officer Akash Palkhiwala described as the company's "mature" business in an interview with MarketWatch, is a key driver of those sales.
For example, handset-chip sales increased 56 percent year over year to $6.34 billion, compared to $5.91 billion projected by Wall Street. Qualcomm's CDMA technologies, or QCT, sector includes handset sales.
"We're not simply winning market share," Palkhiwala told MarketWatch, "which we achieved notably at Samsung, where they elected to utilise our chip rather than their own internal processor for [their Galaxy S22 smartphone]." "In terms of content, we're also getting traction... Chips are growing more complicated, and fewer people are making them, which benefits us."
Qualcomm expects third-quarter QCT revenues of $9.1 billion to $9.6 billion, as well as $1.4 billion to $1.6 billion in sales from its technology licencing, or QTL, division. Analysts expected QCT sales of $8.44 billion and QTL revenue of $1.51 billion.
In fact, Samsung 005930, -0.46 percent CEO Amon anticipates the company's high-end phones will continue to use Qualcomm's Snapdragon processor rather than its own proprietary CPU.
"Samsung is aggressively selling Snapdragon as an ingredient brand for the Galaxy S22 in many of those regions that are now new markets for Qualcomm," Amon told investors. "I believe that is a really important data point... I believe we can be sure that our connection with Samsung will continue to grow in the future."
Qualcomm shares gained more than 6% after hours, closing at $135.10, after gaining 1.2 percent during the regular session.
The firm reported $2.93 billion in second-quarter net income, or $2.57 per share, compared to $1.76 billion, or $1.53 per share, in the previous quarter. Adjusted profits, which remove stock-based compensation charges and other things, were $3.21 per share, up from $1.90 per share in the previous quarter. Total sales in the second quarter hit a new high of $11.16 billion, up from $7.94 billion the year before.
Analysts anticipate $2.95 per share in profits, based on Qualcomm's projection of $2.80 to $3 per share, and $10.63 billion in sales, based on Qualcomm's forecast of $10.2 billion to $11 billion in revenue.
RF front-end sales increased by 28% to $1.16 billion versus an expected $1.12 billion, auto-chip sales increased by 41% to $339 million versus a Street estimate of $282.4 million, and Internet of Things, or IoT, sales increased by 61 percent to $1.72 billion versus a Street estimate of $1.61 billion.
Qualcomm announced $9.55 billion in QCT revenue, up 52 percent from the previous year. Based on the company's prediction of $8.7 billion to $9.3 billion, analysts anticipated $8.9 billion. Chips for handsets and RF, as well as chips for cars and IoT, are all available from QCT.
In the first quarter, revenue from the QTL sector fell 2% to $1.58 billion, but it was still higher than Wall Street expectations of $1.55 billion, based on a corporate projection of $1.45 billion to $1.65 billion.
Qualcomm shares have down 2.1 percent in the last year, compared to a 10.3 percent reduction in the PHLX Semiconductor Index SOX, -0.49 percent, a 12 percent drop in the S&P 500 index SPX, +0.21 percent, and a 11.4 percent drop in the tech-heavy Nasdaq Composite Index COMP, -0.01 percent.
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