Investors appeared displeased by the earnings
reported late Wednesday, as the company slightly missed the consensus revenue estimate for the fiscal first quarter. Amid a shortage of chips around the world and highflying semiconductor stocks, that may be enough to punish the stock.
Qualcomm stock (ticker: QCOM) plunged 7.6% in the extended session, after closing the regular session at $162.30, a decline of 1.5%. The PHLX Semiconductor index retreated 2.1% during regular trading Wednesday.
The chip supplier to the likes of
—which reported a strong quarter last week—reported fiscal first-quarter net income of $2.46 billion, which amounts to $2.12 a share, compared with a profit of $925 million, or 80 cents a share, a year ago. Adjusted for stock compensation, among other things, earnings amounted to $2.17 a share, when Wall Street expected $2.09 a share.
Despite reporting fiscal first-quarter revenue growth of 62% to $8.24 billion, the company missed the consensus revenue estimate of $8.25 billion. Qualcomm executives had previously said they expected sales of $7.8 billion to $8.6 billion.
“We delivered an exceptional quarter, more than doubling earnings year-over-year due to strong 5G demand in handsets and growth in our [radio frequency] front-end, automotive and [Internet of things] adjacencies, which drove record earnings in our chip business,” Qualcomm CEO
Qualcomm has two segments: One sells the company’s wireless technology chips to customers that make cars, mobile devices, and hardware used in the Internet of things. Its second segment makes money by inventing new types of technology that helps various aspects of the wireless industry and licensing the tech to clients. The company said its licensing segment generated sales of $1.66 billion, up 18% from a year ago.
Qualcomm’s wireless business posted a double-digit gain in revenue for the quarter, rising 81% to $6.53 billion, from $3.62 billion a year ago. Demand for chips destined for smartphones pushed much of that growth as it handset and radio frequency segments reported sales growth of 79% to $4.23 billion and 157% to $1.06 billion, respectively.
“Notably, our strong performance and outlook would have been even stronger had we not been supply constrained,” Mollenkopf said in the conference call Wednesday.
Amid automaker plant shutdowns because of a shortage of microchips, Qualcomm’s fiscal first-quarter automotive sales rose 44% to $212 million.
For the fiscal second-quarter, Qualcomm forecast adjusted earnings of $1.55 to $1.75 a share and sales of $7.2 billion to $8 billion. Analysts had expected adjusted earnings of $1.55 a share on sales of $7.09 billion.
Qualcomm stock has gained 88% in the past year, as the PHLX Semiconductor index rose 18%.
Write to Max A. Cherney at [email protected]
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