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Qualcomm (QCOM) earnings Q1 2022

Qualcomm president and CEO Cristiano Amon speaks at a information convention throughout CES 2022 in Las Vegas, Nevada, U.S. January 4, 2022.

Steve Marcus | Reuters

Qualcomm reported first-quarter earnings Wednesday, beating analyst expectations for income and steerage, and providing a powerful outlook for its fiscal second quarter.

Nevertheless, Qualcomm inventory fell over 8% at one level throughout prolonged buying and selling on Wednesday earlier than recovering to a lower of about 2%. It rose 6.25% throughout buying and selling on Wednesday earlier than the outcomes had been launched.

Qualcomm posted its earnings report on the same time as Meta (Facebook), which sparked a sell-off in tech shares after the market closed.

This is how Qualcomm did versus Refinitiv consensus expectations for the quarter ending Dec. 26:

  • EPS: $3.23, adjusted, vs. $3.01 anticipated, up 49% year-over-year
  • Income: $10.7 billion, adjusted, vs. $10.42 billion anticipated, up 30% year-over-year.

Qualcomm stated it anticipated between $10.2 billion and $11 billion in gross sales within the upcoming quarter, forward of analyst estimates of $9.6 billion.

QCT, Qualcomm’s chip enterprise, reported $8.85 billion in gross sales, up 35% from the identical quarter final 12 months. Nevertheless, development slowed from the 63% it reported throughout the identical quarter final 12 months. The expansion underscores that demand for superior microchips stays excessive.

Qualcomm CEO Cristiano Amon stated that the corporate’s provide was bettering throughout a world scarcity of microchips.

“In easy phrases, we see provide enhancements, and our ahead information contemplates the visibility now we have in provide. We nonetheless have extra demand than provide, and we’d ship extra if we may,” Amon stated.

Qualcomm breaks down its chip division into 4 classes, all of which rose in the course of the quarter. The rise in income was primarily pushed by a 42% rise in handset chip gross sales to $5.98 billion.

The corporate stated that annual development was 60% for its Snapdragon chipsets, the elements on the coronary heart of Android telephones that mix processing and 5G connectivity.

“Android is a hit story for us,” Qualcomm CEO Cristiano Amon stated on a name with analysts.

Amon, who took over the CEO job final 12 months, has prioritized diversifying the variety of markets wherein Qualcomm sells its chips. Gross sales of chips for vehicles, Qualcomm’s automotive enterprise, rose 21% to $256 million. Its IoT division, which focuses on low-power chips, elevated gross sales 41% to $1.48 billion.

RF front-end, a division that focuses on chips wanted for wi-fi connectivity, rose 7% to $1.13 billion. The division grew 76% in Qualcomm’s fiscal 2021.

QTL, the corporate’s worthwhile know-how licensing division, elevated 10% year-over-year to $1.81 billion in income.

Qualcomm warned that it hadn’t factored in positive aspects from its QSI funding division into its GAAP earnings forecast for the second quarter due to market volatility. Qualcomm stated that QSI contributed $0.10 to its GAAP earnings per share in the course of the quarter.

Qualcomm stated it repurchased $1.2 billion in shares in the course of the quarter and issued $765 million in dividends.

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