Qualcomm blew away quarterly earnings estimates in its latest report on Wednesday, but its shares fell in choppy aftermarket action as the company's revenue forecasts only met expectations at the midpoint.
As artificial intelligence increasingly dominates the chip sector, Qualcomm's subsidiary, QCOM,
The management said that the company is among the beneficiaries of the artificial intelligence wave. CEO Cristiano Amon talked about how the company's Snapdragon technology will be integrated into the Samsung Galaxy S24 Ultra platform.
This device has many on-device AI features, including translation. “This marks the beginning of how [generative AI] It will advance the overall smartphone experience and highlight the significant opportunity for Snapdragon platforms.
Amon added that the company is also seeing favorable trends for AI-powered smartphones with some of its Chinese customers.
“Ultimately, at least it will have a positive impact on the mix,” he said, as premium smartphones represent the fastest-growing segment of the mobile phone market.
Qualcomm's total revenue for the fiscal first quarter rose to $9.94 billion from $9.46 billion a year earlier, while the FactSet consensus was $9.51 billion.
Revenue for the company's QCT semiconductor business grew 7% to $8.4 billion, while analysts were looking for $8.1 billion. The company's QTL licensing segment revenue declined 4% to $1.5 billion but beat consensus expectations of $1.4 billion.
The company reported quarterly net income of $2.8 billion, or $2.46 per share, up from $2.2 billion, or $1.98 per share, in the same period last year. On an adjusted basis, Qualcomm earned $2.75 per share, while analysts were expecting $2.37 per share.
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“Looking to the future, we are building on this momentum with our leading Snapdragon platforms and technology differentiation in connectivity, computing and on-device generated AI, across phones, cars and PCs. [extended reality] And industrial [Internet of Things]CEO Amon said in the company's earnings statement.
Qualcomm shares initially traded higher in the after-hours following the report, but quickly gave up those gains and were last down 2%.
Despite last quarter's outperformance, the company's revenue outlook for the current quarter was largely in line with the consensus view.
For the March quarter, the company expects revenue in the range of $8.9 billion to $9.7 billion, while the FactSet consensus was $9.3 billion. Management expects QCT revenue to range between $7.6 billion and $8.2 billion, while analysts were looking for $7.9 billion from the segment.
The company is also modeling $2.20 to $2.40 adjusted earnings per share for the fiscal second quarter, with the midpoint of that range exceeding the FactSet view of $2.25.
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