Qualcomm stock rallies more than 6% as handset sales drive record results, strong outlook

Qualcomm Inc. shares rallied in the extended session Wednesday after the chip maker’s record quarterly results and strong outlook blew past Wall Street estimates and the company assured analysts that demand continues to outstrip supply.

said it expects adjusted earnings of $2.75 to $2.95 a share in the third quarter on revenue of $10.5 billion to $11.3 billion, while analysts surveyed by FactSet estimated $2.64 a share on revenue of $10.02 billion.

While some analysts are concerned that chip inventories are on the rise and that the supply shortage is beginning to come to a close, Qualcomm Chief Executive Cristiano Amon dismissed those worries on a conference call, and said continued strong demand is worked into the company’s guidance.

“We’ll still have more demand than supply across all business,” Amon told analysts.

A big driver of those sales come from the company’s core handset business, which saw strong gains in the second quarter and that Qualcomm Chief Financial Officer Akash Palkhiwala characterized to MarketWatch in an interview as the company’s so-called “mature” business.

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 a part of Qualcomm’s CDMA technologies, or QCT, segment.

“We’re not just gaining share, which we did especially at Samsung where they decided to use our chip rather than their own internal chip for [their Galaxy S22 smartphone],” Palkhiwala told MarketWatch. “We’re also gaining share in terms of content … chips are becoming more complex and fewer people make those chips, and that plays to our advantage.”

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

In fact, CEO Amon expects Samsung


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