Qualcomm reported record first fiscal quarter earnings Wednesday for its chip business including 5G, auto and IoT semiconductors.
Earnings doubled year-over-year for the quarter that ended December 27, while total revenues hit $8.23 billion, including $6.5 billion for its chip segment and $1.6 billion for its licensing segment.
The revenue result fell below analyst projections of $8.27 billion and Qualcomm’s share price dropped 7% in extended-hours trading to $140.40. The semiconductor sector was overall down by 2% on Wednesday, even as Nasdaq was up by 4% for the week but dropped into negative territory Wednesday.
Nonetheless, Qualcomm revenues were 62% ahead of the same quarter a year ago and 82% ahead for the technology segment. Earnings per share were $2.12, and improvement of 165% year-over-year.
Qualcomm’s radio front end saw the biggest growth in the quarter, up by 157% to reach $1.061 billion, but handsets were the top revenue producer at $4.2 billion, up 79% year-over-year.
Automotive chips were $212 million, up by 44%, while IoT chips were $1.044 billion up by 48%.
Qualcomm forecast second quarter revenues will reach $7.2 billion to $8 billion, with technology ranging from $6 billiion to $6.5 billion, which apparently didn’t satisfy investors.
“We remain well-positioned as the 5G ramp continues and we extend our core technology roadmap to adjacent industries,” said CEO Steven Mollenkopf in a statement.
In a call with analysts, he said Qualcomm’s auto segment is positioned to take advantage of rapid transformation in the auto industry. The chipmaker already provides 4G and 5G modems to 150 million vehicles and has set up partnerships with General Motors and tier 1 auto suppliers.
Mollenkopt will retire June 30 and be replaced by Cristiano Amon, as announced in January. Mollenkopf called it a “pleasure and an honor” to serve as CEO for 7 years.
Amon said on the call that Qualcomm should see a material impact later in 2021 with its renewed ability to sell chips to Huawei based on the Chinese company's 16% share of the OEM market. Qualcomm won a Commerce Department permit to resume sales to Huawei in late 2020 after U.S. companies had been placed on a trade restriction order throughout much of the Trump administration.
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