Qualcomm (QCOM) Earnings Q1 2021

Cristiano Amon, president of Qualcomm and Qualcomm CDMA Technologies, answers a question during a panel discussion on 5G wireless broadband technology during the 2018 CES on January 10, 2018 in Las Vegas, Nevada.

Steve Marcus | Reuters

Qualcomm reported first quarter earnings after the bell on Wednesday.

Adjusted earnings beat expectations but Qualcomm sales were slightly below Wall Street’s expectation, sending the stock down 7% in extended trading.

Here’s what Qualcomm did compared to Refinitiv consensus estimates:

  • Earnings: $ 2.17 per share, adjusted, vs. $ 2.10 estimated
  • Revenue: $ 8.23 ​​Billion, Adjusted, vs. Estimated $ 8.27 Billion

Sales grew 63% year-on-year while income grew 119%.

Both revenue and income saw year-over-year growth as Qualcomm’s business has been driven by 5G adoption smartphones, requiring its chips and intellectual property, as well as an electronics boom during the epidemic. .

Qualcomm said it plans to sell for $ 7.2 billion to $ 8 billion in the current quarter, a stronger forecast than analysts are tracking the stock.

At the end of last year, Qualcomm said it planned to change the way it reported its business segments to break sales from handsets, radio frequencies, automotive and Internet of Things chips. Those business units were previously reported together in Qualcomm’s “QCT” section.

Chip sales grew strongly, Qualcomm revealed on Wednesday, a 79% year-over-year increase in handset chips to $ 4.22 billion in the quarter ending in December. Its RF front-end chips, which Qualcomm sees as strategically important and used for 5G in conjunction with Qualcomm’s modems, were 157% year-over-year.

Qualcomm’s business is closely tied to new handsets that use 5G chips. Qualcomm expects high-single-digit growth of between 450 million and 550 million 5G devices in phones shipped in FY 2021. Qualcomm introduced 5G modems for Apple iPhones.

Overall, Qualcomm’s chip division, QCT, reported sales this quarter, up 81% year-over-year.

Sales were up 18% year-over-year to $ 1.66 billion in Qualcomm’s QTL licensing division, which is a major part of the San Diego company’s profit. However, Qualcomm’s forecast sales for the licensing division between $ 1.25 billion and $ 1.45 billion are lower than the analyst expectation of $ 1.43 billion.

In January, Qualcomm said it planned to buy Nuvia, a chip startup founded by Apple’s giants, for $ 1.4 billion to enhance the technology used for its smartphones, laptops and car chips. . Qualcomm said it expected to spend $ 190 million this year on research and development and sales, general and administrative expenses related to the purchase, of which $ 90 million is share-based compensation.

Wednesday’s report marks Chipmaker’s first since it announced last month that CEO Steve Mollenkopf would retire at the end of this year and be replaced by the company’s current president, Cristiano Amon. Molenkoff’s retirement comes after seven challenging years, including legal issues with Apple, hostile takeover attempts from the Federal Trade Commission and Broadcom.