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Qualcomm boosts smartphone demand in China and hits record first-quarter revenue

Qualcomm reported record first-quarter revenue on Wednesday and beat Wall Street’s guidance for the current quarter, helped by strong growth in its Android business and demand from Chinese phone makers.

The US chips firm is forecasting second-quarter revenue of $10.2 billion (roughly Rs. 76,353 crore) to $11 billion (roughly Rs. 82,341 crore), higher than analysts’ estimates of $9.61 billion (roughly Rs. 71,936 crore). rupees), according to IBES data from Refinitive.

The company has benefited from Huawei’s withdrawal from the smartphone market, prompting other Chinese phone brands including Xiaomi, Honor and Oppo to turn to Qualcomm for their chips.

“Android is driving growth,” Qualcomm CFO Akash Palkhivala told Reuters. In the first quarter, mobile phone revenue grew 42% year-over-year to $6 billion (roughly Rs. 44,916 crore), driven by more than 60% revenue growth from Snapdragon chipsets for Android devices.

The changing Chinese market has provided Qualcomm with “huge opportunities … and we are capitalizing on them,” Palkhivala said.

He said during an earnings call that the second half of fiscal year 2022 is “shaping up” like the second half of fiscal 2021, with “a very strong growth rate compared to last year.”

First quarter net income rose to $3.69 billion (roughly Rs. 27,623 crore) or $3.23 (roughly Rs. 240 crore) per share from $2.51 billion (roughly Rs. 18,789 crore) or $2.17 ( approximately 162 crores) per share. , a year earlier. Palhiwala forecasts more than 30 percent non-GAAP earnings-per-share growth in the third quarter.

However, Qualcomm shares fell about 3 percent after hours as the results were overshadowed by weaker-than-expected earnings and guidance from Facebook-owned Meta.

“We think investors are somewhat concerned about a possible increase in demand and/or double orders from its (Qualcomm) customers due to limited supply in the industry,” said Kingai Chan, an analyst at Summit Insights Group.

While restrictions on the supply of chips that have crippled many industries during the pandemic remain in place, CEO Cristiano Amon told an earnings call that Qualcomm has invested to make sure it can ship its products to its customers. and this offer will improve in the second half of 2022.

According to Refinitiv IBES data, first-quarter revenue was $10.7 billion (roughly Rs. 80,103 crore), compared to analysts’ estimates of $10.42 billion (roughly Rs. 78,001 crore). In the first quarter, its chip segment generated $8.85 billion (roughly Rs. 66,248 crore) in revenue, higher than analysts’ expectations of $8.69 billion (roughly Rs. 65,051 crore), according to FactSet.

© Thomson Reuters 2022

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