Qualcomm earnings beat estimates as smartphone chip sales suggest recovery

Qualcomm reported fiscal first-quarter results on Wednesday that topped analysts’ estimates as sales of handset chips jumped 16% from a year earlier. The stock rose almost 3% in extended trading.

Here’s how the chipmaker did for the quarter ending Dec. 24, per consensus expectations from LSEG, formerly known as Refinitiv:

• Earnings per share: $2.75 adjusted vs. $2.37 expected
• Revenue: $9.92 billion adjusted vs. $9.51 billion expected

For the current quarter, Qualcomm said it expects adjusted earnings of between $1.73 and $1.93 per share on revenue of $8.9 billion to $9.7 billion. Consensus expectations, according to LSEG, were for earnings of $2.25 per share on $9.3 billion of revenue.

Net income rose 24% during the quarter to $2.77 billion, or $2.48 per share, from $2.24 billion, or $1.98 per share, a year ago.

Qualcomm is best-known for making smartphone chips — both the modems that connect them to cellular networks, as well as the processors at the heart of high-end Android devices.

Under CEO Cristiano Amon, Qualcomm has been working to apply its chip technology to markets beyond smartphones, including PCs, cars, and virtual reality headsets. But it’s still a major smartphone supplier as the global market has slumped over the past two years.

Qualcomm said it shipped $6.69 billion in handset chips during the December quarter, up 16% year-over-year, a positive sign for the smartphone market after two years of declines.

Notably, Samsung’s high-end Galaxy phones launched in January use Qualcomm processors, and the company expects that business to continue for several years under a new deal, foreclosing the possibility that the second-largest smartphone maker would eschew Qualcomm for its own chips.

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