Qualcomm posted record first-quarter revenue on Wednesday and beat Wall Street forecasts for the current quarter, boosted by strong growth in the Android business and demand from China's handset makers.
The US chips firm forecast second-quarter revenue between
$10.2 billion and $11 billion, above analysts' estimates of $9.61 billion,
according to IBES data from Refinitiv.
The company has benefited from the exit of Huawei from the
smartphone market, which has led other Chinese phone brands — including Xiaomi,
Honor, and Oppo — to turn to Qualcomm for their chip needs.
"Android is driving the growth," Qualcomm chief
financial officer Akash Palkhiwala told Reuters. In the first quarter, handset
revenues rose 42 percent year-over-year to $6 billion, driven by greater than
60 percent growth in revenues from Snapdragon chipsets for Android devices.
The shifting Chinese market had given Qualcomm
"tremendous opportunity... and we're capitalising on it," said
Palkhiwala.
He said during an earnings call that the second half of the
fiscal 2022 year is "shaping up" like the second half of fiscal 2021,
with "very strong year over-year-growth rates."
Net income in the first quarter rose to $3.69 billion, or
$3.23 per share, from $2.51 billion, or $2.17 per share, a year earlier.
Palkhiwala forecasted over 30 percent of non-GAAP EPS growth in the third
quarter.
Still, Qualcomm shares fell about 3 percent in after hours
trading as the results were overshadowed by Facebook owner Meta's
weaker-than-expected profit and forecast.
"We think investors are somewhat concerned about
possible demand pull-in and/or double ordering by its (Qualcomm's) customers
due to the industry supply constraint," said Kinngai Chan, an analyst at
Summit Insights Group.
While chip supply constraints that have crippled many
industries during the pandemic continue, chief executive Cristiano Amon told
the earnings call that Qualcomm has invested to make sure it is able to deliver
to its customers and that supply will improve in the second half of 2022.
Revenue in the first quarter was $10.7 billion, compared
with analysts' estimates of $10.42 billion, according to Refinitiv IBES data.
Its chip segment had first-quarter revenue of $8.85 billion, above analyst
expectations of $8.69 billion, according to data from FactSet. - Reuters
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