Company gives upbeat forecast at the midpoint
This hasn’t been a pretty earnings season for prominent chip companies so far, but Qualcomm Inc. is breaking from the mold.
The chipmaker reported better-than-expected results for its latest quarter on Wednesday afternoon, and issued an upbeat outlook at the midpoint. Management said that the company is benefiting from AI as customers look to enable artificial intelligence on their devices.
“As AI expands rapidly from the cloud to devices, we are extremely well-positioned to capitalize on this growth opportunity, given our leadership position at the edge across technologies, including on-device AI,” Chief Executive Cristiano Amon said on the earnings call.
That’s already starting to play out in Qualcomm’s QCOM, -1.05% financials. “Recently launched flagship Android devices powered by Snapdragon 8 Gen 3 are seeing strong demand globally, especially in China,” he noted.
The company is looking ahead to the opportunity in AI personal computers, with “upcoming launches of next-generation Windows AI PCs powered by Snapdragon,” Amon added.
Shares rose about 4% in the extended session.
Qualcomm reported fiscal second-quarter net income of $2.33 billion, or $2.06 a share, compared with $1.70 billion, or $1.52 a share, in the year-earlier quarter. On an adjusted basis, Qualcomm posted earnings per share of $2.44, up from $2.15 a year before, while analysts were modeling $2.33.
Revenue at Qualcomm rose slightly to $9.39 billion from $9.28 billion, exceeding the FactSet consensus view, which was for $9.35 billion.
The company’s QCT semiconductor business saw revenue increase 1% to $8.03 billion. Analysts were looking for $8.00 billion.
Within QCT, handset revenue was up 1% to $6.18 billion, while Internet-of-Things revenue dropped 11% to $1.24 billion. Automotive revenue is still a small piece of the pie at $603 million, but that was up 35% from a year before.
“Following a record performance in the second fiscal quarter, we expect QCT automotive revenues to grow by low-double-digit percentage quarter over quarter as the increase in our design win pipeline continues to materialize into revenue,” Chief Financial Officer Akash Palkhiwala said on the earnings call.
Qualcomm’s QTL business, which does licensing, was up 2% to $1.32 billion, while the FactSet consensus was for $1.31 billion.
For the June quarter, Qualcomm models $8.8 billion to $9.6 billion in revenue, including $7.5 billion to $8.1 billion of QCT revenue. Analysts were modeling $9.06 billion in total revenue and $7.83 billion from QCT.
Adjusted EPS is forecast to be $2.15 to $2.35, while the FactSet consensus called for 2.18.
Qualcomm’s earnings come as recent chip-sector results from Intel Corp. INTC, -0.33%, Super Micro Computer Inc. SMCI, -14.03% and Advanced Micro Devices Inc. AMD, -8.91% have been met with chilly reactions from investors.