Qualcomm shares rose as much as 6% in extended trading on Wednesday after the chipmaker reported fiscal second-quarter earnings that exceeded analysts' estimates.
Here's how the company did:
- Earnings: $1.90 per share, adjusted, vs. $1.67 per share as expected by analysts, according to Refinitiv.
- Revenue: $7.93 billion, vs. $7.62 billion as expected by analysts, according to Refinitiv.
Revenue grew 52% on an annualized basis in the quarter, which ended on March 28, according to a statement. Lower phone demand because of the coronavirus in the year-ago quarter made for faster growth than usual. In the previous quarter, revenue grew 63%.
The company's profitable Qualcomm Technology Licensing segment, which includes mobile handset patent royalties, contributed $1.61 billion in revenue, which was up 51% and above the $1.35 billion consensus among analysts surveyed by FactSet.
Qualcomm derives much of its revenue from handset chips, and the deployment of 5G networks creates a growth opportunity for the company, particularly as the economy reopens and people begin to travel more.
Handset revenue, at $4.07 billion, grew 53%, although analysts polled by FactSet had expected $4.23 billion. The larger Qualcomm CDMA Technologies Segment, which includes handsets as well as radio frequency front end, internet of things and automotive components, came up with $6.28 billion in revenue, surpassing the $6.26 billion FactSet consensus.
The company said it now has an upward bias to high-single-digit growth in 3G, 4G and 5G handset shipments in 2021, rather than the high-single-digit growth forecast it gave in January.
With respect to guidance, Qualcomm called for fiscal third-quarter adjusted earnings of $1.55 to $1.75 per share on $7.1 billion to $7.9 billion in revenue. Analysts polled by Refinitiv had expected $1.52 in adjusted earnings per share on $7.11 billion in revenue.
In the quarter Qualcomm acquired chip start-up Nuvia for $1.4 billion before working capital and other adjustments, and Qualcomm said that on June 30 Cristiano Amon, its president, will replace current CEO Steve Mollenkopf.
Notwithstanding the after-hours move, Qualcomm stock is down 10% since the start of the year, compared with a roughly 12% gain in the S&P 500 index over the same period.
Executives will discuss the results with analysts on a conference call starting at 4:45 p.m. Eastern time.
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