Qualcomm reported second-quarter earnings Wednesday after the bell, beating Wall Street expectations for sales and earnings, and driving the stock up over 4% in extended trading.
Here’s how Qualcomm did versus Refinitiv consensus expectations:
- EPS: $3.21, adjusted, versus $2.91 expected, up 69% year-over-year
- Revenue: $11.16 billion, adjusted, versus $10.60 billion expected, up 41% year-over-year
- QCT (chip sales): $9.55 billion versus $8.86 expected per StreetAccount, up 52% year-over-year
- QTL (technology licensing): $1.58 billion versus $1.55 expected per StreetAccount, down 2% year-over-year
Qualcomm said it expected between $2.75 and $2.95 in earnings per share in the third quarter on about $10.9 billion in sales. The company’s forecast is stronger than the $9.98 billion sales guidance that Wall Street expected.
Qualcomm makes most of its money from selling processors and modems for smartphones and through licensing technology for connecting to cellular networks. Its strong results on Wednesday comes amid wider market skepticism about chip companies in 2022, which benefited from strong demand and limited supply during the Covid-19 pandemic.
Under CEO Cristiano Amon, Qualcomm has emphasized to investors that it can be a chip provider for many additional markets and can diversify away from its bread and butter handset chip business.
All four of Qualcomm’s major chip markets grew during the quarter ending in March.
Handsets, the biggest market for Qualcomm chips, grew 56% on an annual basis to $6.33 billion, suggesting that a potential slowdown in smartphone sales in an inflationary environment has yet to hit the primary Android chipmaker.
RF front-end, a business focusing on selling a part that enables 5G connections, grew 28% to $1.16 billion.
The automotive market segment remains small in terms of sales today, but the company remains optimistic that it’s striking partnerships with automakers and suppliers that will lead to more growth down the line. Qualcomm reported $339 million in automotive sales, up 41% annually. Revenue from Veoneer wasn’t included in March quarter, although Qualcomm is closing the acquisition in the current quarter.
The IoT business, which makes low-power and low-cost chips, reported 61% growth to $1.72 billion.
Qualcomm said it paid $764 million in cash dividends and repurchased $951 million worth of its shares during the quarter.