Qualcomm results, forecast top expectations

Qualcomm this week forecast sales and profits above analyst expectations as artificial intelligence features helped drive sales of the smartphones, laptops and other devices powered by its chips.

For its current fiscal second quarter, Qualcomm forecast sales range with a midpoint of US$10.75 billion and adjusted profits of US$2.80 per share, both above analyst estimates of sales of US$10.34 billion and adjusted profit US$2.69 per share, according to data from LSEG.

Qualcomm reported sales of US$11.67 billion and adjusted profits of US$3.41 per share for its fiscal first quarter ended December 29.

Both were well above analyst estimates of US$10.93 billion for sales and adjusted profits of US$2.96 per share, according to data from LSEG.

Qualcomm, the world's biggest supplier of modem chips that connect smartphones to wireless data networks, said last month it had won a major new deal Samsung Electronics to provide chips for the South Korean firm's flagship mobile phones around the world.

California-based Qualcomm is also working with Microsoft and computer manufacturers to offer a range of laptops and PCs based on its chips.

After the results, Qualcomm shares hovered up and down within 1 per cent of their closing price.

At the midpoints of the ranges, Qualcomm forecast second-quarter revenues of US$9.2 billion for its chip business and US$1.35 billion for patent licensing.

Wall Street had expected US$8.90 billion for chips and US$1.43 billion for patent licensing, according to LSEG data.

While Qualcomm has diversified its offerings into PCs, cars and other markets, the smartphone market remains its stronghold, supplying both Apple and Chinese handset makers such as Xiaomi, Oppo and Vivo.

The Chinese smartphone market has struggled with weak demand, with the Chinese government stepping into provide subsidies for low- and mid-tier handset sales in the country.

Qualcomm said it had fiscal first quarter handset revenue of US$7.57 billion, up 13 per cent from the US$6.69 billion it reported a year earlier and below the 20 per cent growth the company saw in its chip revenues overall. Analysts expected US$7.01 billion, according to data from Visible Alpha.

Qualcomm said fiscal first quarter automotive chip revenue was US$961 million while sales from "internet of things" chips - into which it also lumps PC chip sales - were US$1.55 billion.

A year earlier, automotive chip revenue was US$598 million and internet of things revenue was US$1.1 billion.

Analysts had expected US$905 million in automotive revenue and US$1.40 billion in IoT revenue, according to data from Visible Alpha.

For the just ended quarter, Qualcomm said overall chip revenue was US$10.08 billion with licensing revenues at US$1.54 billion.

Analysts had expected US$9.29 billion for chips and US$1.54 billion for licensing.