Qualcomm (QCOM) earnings Q3 2022
Qualcomm president and CEO Cristiano Amon speaks about Qualcomm’s technology for automakers at a news conference during CES 2022 in Las Vegas, Nevada, January 4, 2022.
Steve Marcus | Reuters
Qualcomm reported third-quarter earnings after the bell on Wednesday, slightly beating Wall Street expectations, but guidance for the current quarter was short of consensus expectations.
Qualcomm stock dropped over 4% in extended trading.
Here is how Qualcomm did versus Refinitiv consensus expectations:
- EPS: $2.96, adjusted, versus $2.87 expected, up 53% year-over-year.
- Revenue: $10.93 billion, adjusted, versus $10.88 billion expected, up 37% year-over-year.
Qualcomm said it expected around between $3 and $3.30 in earnings per share during the fourth quarter on between $11 billion and $11.8 billion in sales, falling short of Wall Street’s Q4 earnings expectations of $3.23 per share and $11.87 billion in sales.
Qualcomm CEO Cristiano Amon said in a statement that the company’s results were strong despite facing a “challenging macroeconomic environment.” Qualcomm sales rose 37% during the quarter.
Qualcomm’s biggest line of business is selling processors and modems for smartphones. The company’s handset business grew 59% on an annual basis to $6.15 billion, despite signs that smartphone sales might be slowing due to macroeconomic conditions such as inflation. Qualcomm said it’s on pace for its handset business to grow 50% this year thanks to more expensive chips and selling more chips to a broader market.
Handsets are reported under a unit called QCT along with the other semiconductors Qualcomm sells, like RF front end, chips for cars and low-power chips for connected devices. That segment grew 45% on an annual basis to $9.38 billion. Handsets were the fastest growing business in the segment despite Qualcomm’s recent efforts to diversify into other types of chips.
Qualcomm announced a partnership with Samsung through 2030 that includes patent licensing and supplying Snapdragon processors for handsets. Samsung is the top smartphone manufacturer in the world on a unit basis.
Automotive chips grew 38% on an annual basis to $350 million, an all-time-high for Qualcomm, suggesting it’s still a small business compared to Qualcomm’s other lines. Qualcomm’s IoT business, which makes low-power chips for connected devices, grew 31% to $1.83 billion.
QTL, the other major Qualcomm unit that’s comprised of licensing fees related to 5G and other technologies the company makes, reported nearly $1.52 billion in sales, a 2% annual rise. It hasn’t been growing strongly in recent years but remains a major source of profit for the chipmaker.
Qualcomm’s gross margin came up short of expectations during a period where chip costs have been rising due to shortages and issues with Chinese production. Qualcomm outsources its chip manufacturing to outside foundries which have been booked solid since the start of the pandemic. Qualcomm reported a 56% gross margin versus a consensus estimate of 57.8%.
Qualcomm said it spent $1.3 billion on shareholder return during the quarter, including $842 million in dividends.
Qualcomm president and CEO Cristiano Amon speaks about Qualcomm’s technology for automakers at a news conference during CES 2022 in Las Vegas, Nevada, January 4, 2022. Steve Marcus | Reuters Qualcomm reported third-quarter earnings after the bell on Wednesday, slightly beating Wall Street expectations, but guidance for the current quarter was short of consensus expectations.…
- Activist investor Starboard said to build stake in Rogers Corp. – report
- Sea World helicopter crash survivors relive final moments before choppers collided on Gold Coast
- In her own words… watch Prince Harry’s ‘older woman’ reveal how she took his virginity
- Tips and tools for positive mental health
- Ambulatory surgery centers, robotics seen as trends for orthopedic devices in 2023 (JNJ)