Qualcomm (QCOM) Q3 2022 earnings

Qualcomm (QCOM) Q3 2022 earnings

Qualcomm President and CEO Cristiano Amon talks about Qualcomm know-how for automakers at a press convention throughout CES 2022 in Las Vegas, Nevada, Jan. 4, 2022.

Steve Marcus | Reuters

Qualcomm talked about Third Quarter Earnings After the bell on Wednesday, barely beating Wall Avenue estimates, however steering for the present quarter fell wanting expectations.

Qualcomm inventory is down greater than 4% in prolonged buying and selling.

Here is how Qualcomm carried out in opposition to Refinitiv consensus expectations:

  • EPS: $2.96, adjusted, versus $2.87 anticipated, up 53% year-over-year.
  • he received: $10.93 billion, adjusted, versus $10.88 billion anticipated, up 37% year-over-year.

Qualcomm mentioned it expects earnings of $3 to $3.30 per share in the course of the fourth quarter and between $11 billion and $11.8 billion in gross sales, lacking Wall Avenue’s fourth-quarter earnings forecast of $3.23 per share and $11.87 billion in gross sales.

Qualcomm CEO Cristiano Amon mentioned in an announcement that the corporate’s outcomes have been robust regardless of being in a “difficult macroeconomic surroundings.” Qualcomm’s gross sales elevated 37% in the course of the quarter.

Qualcomm’s largest enterprise is the sale of processors and modems for smartphones. The corporate’s cell phone enterprise grew 59% yr over yr in the course of the quarter to $6.15 billion, regardless of indicators that smartphone gross sales could already be slowing attributable to macroeconomic circumstances comparable to inflation.

However Qualcomm forecasts that the corporate’s cellphone gross sales development will gradual in the course of the fourth quarter of the fiscal yr, reflecting that the decline in smartphone demand might harm its core enterprise when it comes to income and income. The corporate expects working bills to rise between 6% and eight%, respectively, in the course of the quarter.

Qualcomm Chief Monetary Officer Akash Palkhiwala mentioned that the corporate’s anticipated weak spot within the final quarter of the yr in gross sales of smartphone chips will likely be within the center and decrease ranges, not like chips for the most costly telephones.

Qualcomm mentioned it is nonetheless on monitor to develop its cellular enterprise to simply below 50% this yr due to dearer chips.

The telephones are reported below a unit known as QCT together with different semiconductors bought by Qualcomm, comparable to RF front-end, automotive chips and low-power chips for related gadgets. This phase grew 45% yr over yr to $9.38 billion. Telephones have been the quickest rising enterprise on this phase regardless of Qualcomm’s current efforts to diversify into different kinds of chips.

Qualcomm introduced Partnership with Samsung until 2030 Contains patent licensing and provision of Snapdragon processors for telephones. Samsung is the world’s primary smartphone producer based mostly on the unit.

Auto chips grew 38% yr over yr to $350 million, an all-time excessive for Qualcomm, indicating that it’s nonetheless a small firm in comparison with different Qualcomm traces. Qualcomm’s Web of Issues enterprise, which makes low-power chips for related gadgets, grew 31% to $1.83 billion.

QTL, Qualcomm’s different main unit that consists of licensing charges associated to 5G and different applied sciences the corporate makes, reported practically $1.52 billion in gross sales, a year-on-year enhance of two%. It has not skilled robust development in recent times however stays a significant supply of revenue for the chip maker.

The corporate’s gross margin got here in beneath expectations as chip prices rose attributable to shortages and issues with Chinese language manufacturing. Qualcomm is outsourcing its chip manufacturing to foundries which have been aggressively booked because the begin of the pandemic. Qualcomm reported a gross margin of 56% in opposition to a consensus estimate of 57.8%.

Qualcomm mentioned it spent $1.3 billion on shareholder return in the course of the quarter, together with $842 million in dividends.

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