ultimateimp – Qualcomm reported better-than-expected earnings and revenue for its fiscal first quarter ending December 29, 2024, surpassing analyst expectations. The company also provided strong guidance for the upcoming quarter, signaling continued growth in the semiconductor market.
Qualcomm Earnings vs. Estimates:
- Adjusted earnings per share: $3.41 (vs. $2.96 expected)
- Revenue: $11.67 billion (vs. $10.93 billion expected)
Qualcomm’s revenue rose 18% from $9.92 billion a year ago, reflecting robust demand for its mobile and AI-driven semiconductor solutions. However, despite strong results, Qualcomm shares declined in extended trading.
March Quarter Forecast:
For the upcoming quarter, Qualcomm projects revenue between $10.2 billion and $11 billion, exceeding analysts’ midpoint estimate of $10.34 billion. The company expects adjusted earnings per share between $2.70 and $2.90, with the midpoint surpassing Wall Street’s forecast of $2.69 per share.
Qualcomm Net Income and Growth Across Divisions:
Qualcomm’s net income increased 15%, reaching $3.18 billion ($2.83 per share), up from $2.77 billion ($2.46 per share) last year. The company excluded settlement revenue, acquisition costs, and R&D expenses from its adjusted earnings.
Chip Sales Drive Growth:
All three of Qualcomm’s major chip markets saw growth during the quarter. Its QCT division, which includes physical chip sales, surged 20% to $10.1 billion. Strong demand for 5G, AI-powered processors, and automotive chips contributed to the company’s impressive performance.
Qualcomm Handset Market Sees Strong Growth
Mobile handsets remain Qualcomm’s largest market, generating $7.57 billion in sales, a 13% annual increase. This figure surpassed FactSet analyst expectations of $7.04 billion, which projected only 5% growth.
CEO Cristiano Amon credited the demand for premium-tier smartphones in China and Samsung’s exclusive use of Qualcomm processors in its latest Galaxy devices as key growth drivers. Qualcomm also expects handset revenue to increase by 10% in 2025, signaling continued market momentum.
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Automotive Becomes Qualcomm’s Fastest-Growing Segment
Qualcomm’s automotive business saw the highest growth rate, expanding 61% year-over-year to $961 million in sales. Long-term contracts for automotive chips and software are now translating into significant revenue, positioning Qualcomm as a key player in the automotive technology sector.
AI and IoT Businesses Drive Expansion
On-Device AI and DeepSeek R1 Model
Amon highlighted Qualcomm’s AI capabilities, particularly its ability to run efficient AI models like DeepSeek R1 locally instead of relying on cloud processing. He emphasized that AI models are evolving rapidly, becoming smaller, more efficient, and more capable of running directly on devices powered by Qualcomm chips.
IoT Business Grows 36%
Qualcomm’s IoT division recorded a 36% revenue increase, reaching $1.55 billion. This segment includes low-power industrial chips, Snapdragon processors for Windows laptops, and chips for Meta’s Quest headsets and Ray-Ban smart glasses. Qualcomm now holds 10% market share in laptops over $800, reflecting its growing influence in computing.
QTL Licensing and Shareholder Returns
Qualcomm’s QTL licensing business, which earns revenue from 5G and cellular technology patents, generated $1.54 billion. The company signed new 4G licensing deals with Chinese smartphone maker Transsion and finalized long-term agreements with two other Chinese manufacturers.
Additionally, Qualcomm returned $942 million to shareholders in dividends and spent $1.8 billion on share repurchases, reinforcing its commitment to investor returns.
