SAN DIEGO – Chipmaker Qualcomm Inc. (Nasdaq: QCOM) surpassed expectations for its third quarter ending June 23, reporting earnings of $2.33 per share, excluding items, on revenue of $9.4 billion. The business announced earnings after the market closed Wednesday (July 31).
Approximately two dozen analysts surveyed by Yahoo Finance had expected something less from the company: earnings of $2.25 per share on revenue of $9.22 billion.
Shares rose in after-hours trading, but details of an investor conference call caused them to backtrack, then slip lower on Thursday. Investors were concerned about how quickly the smartphone market is expected to grow.
The business offered upbeat guidance for the current, fourth quarter: $2.45 to $2.65 per share in earnings, excluding items, with revenue in the range of $9.5 billion to $10.3 billion.
On Wednesday – a day that rewarded tech stocks such as AI darling Nvidia (Nasdaq: NVDA) – shares of Qualcomm closed up 8.4% to $180.95. The earnings report came after the closing bell. In after-hours trading, shares gained another 6.5% then backtracked. They were trading 1.5% lower than their closing price in the early evening.
Looking through the lens of Generally Accepted Accounting Principles, or GAAP, Qualcomm reported net income of $2.12 billion, or $1.88 per share. In the same quarter of 2023, the business reported net income of $1.8 billion, or $1.60 per share, on revenue of $8.45 billion.
Executing on Plan to Grow, Diversify
“Our third quarter results reflect strong execution of our growth and diversification strategy, with QCT quarterly revenues and EBT margins at the high end of guidance,” said Cristiano Amon, the company’s president and CEO, in a statement issued by the company.
QCT is Qualcomm’s chipmaking business, Qualcomm Technologies Inc. EBT stands for earnings before taxes.
President & CEO
Qualcomm Inc.
“We are excited about the launch of our Snapdragon X Series solutions for PCs that deliver leading performance, unmatched power efficiency and personalized AI experiences,” Amon continued. “This launch represents a significant milestone in our transformation from a communications company to a leading intelligent computing company.”
Though not part of tech’s “Magnificent Seven,” Qualcomm is getting attention in a market that is agog over artificial intelligence (AI).
Qualcomm’s Snapdragon X chips for PC laptops is based on technology from Arm Holdings PLC (Nasdaq: ARM) rather than conventional x86 architecture. What’s more, Qualcomm-powered high-performance laptops have AI thanks to their Snapdragon chips’ fast neural processing unit or NPU. The chips were designed for optimal battery life, a sign of their Qualcomm DNA. The San Diego company, just shy of its 40th birthday, got ahead in the smartphone world by designing products that conserve power.
“We obviously think of power first,” said Kedar Kondap, senior vice president and general manager of compute and gaming at Qualcomm Technologies, during an interview in early July.
Other established chipset lines showed gains – mostly. Automotive chip revenue grew 87% year over year to $811 million. IoT (internet of things) revenue declined 8% to $1.36 billion. Mobile phone handset revenue grew 12% to $5.9 billion.
The business had $7.77 billion in cash at the end of the third quarter.
On the market awareness front, Qualcomm announced on July 1 that the Snapdragon logo will appear on the jerseys of Manchester United soccer team for the 2024-2025 season.
Manchester United played an exhibition game against Real Betis during a U.S. tour stop at Mission Valley’s Snapdragon Stadium on earnings day.
Qualcomm shares were trading Thursday near the mid-point of their 52-week range of $104.33 and $230.63.
The corporation announced July 17 that it would distribute a quarterly cash dividend of 85 cents per share. The dividend will be payable Sept. 26 to shareholders of record on Sept. 5. Qualcomm bought back $1.3 billion worth of shares in the third quarter.
The company set a Nov. 19 date for its investor day in New York. The company plans to highlight its diversification into markets such as IoT and automotive.
Qualcomm Inc.
FOUNDED: 1985
CEO: Cristiano Amon
HEADQUARTERS: Sorrento Mesa, San Diego
BUSINESS: Fabless semiconductor maker, specialist in developing and commercializing foundational technologies for the wireless industry
REVENEUE: $38.5 billion in fiscal 2023
STOCK: QCOM (Nasdaq)
WEBSITE: qualcomm.com
CONTACT: 858-587-1121
NOTABLE: Qualcomm has had a neural processing unit (NPU) for artificial intelligence on its mobile platform for more than seven years
