Sales to Android phone manufacturers help Qualcomm report a strong quarter
Chip designer Qualcomm was one of several mobile-related firms that have reported strong profits in the last few days including Google parent Alphabet, and T-Mobile. For Qualcomm's fiscal first quarter of 2022, the fabless firm reported (based on generally accepted accounting principles) revenue of $10.71 billion, up 30% from the fiscal first quarter of 2021. Net income for the period weighed in at $3.40 billion, 38% higher than the $2.46 billion that was reported last year.
Qualcomm might have been singing, "We're in the chips" as its diluted earnings per share (EPS) rose 41% on an annual basis from $2.12 to $2.98. Company president and CEO Cristiano Amon said, "Our record quarterly results reflect the strong demand for our products and technologies, with QCT (Qualcomm's largest division and the one responsible for mobile components) revenues exceeding those of any fabless semiconductor company."
Amon added, "We are at the beginning of one of the largest opportunities in our history, with our addressable market expanding by more than seven times to approximately $700 billion in the next decade. Our one technology roadmap positions us as the partner of choice for both mobile and the connected intelligent edge."
The Motorola Edge X30 was the first phone unveiled with the Snapdragon 8 Gen 1 under the hood
During the conference call, the executive discussed the global chip shortage and said, "Despite ongoing challenges across the global supply chain, our multi-sourcing and capacity expansion initiatives will provide incremental improvements to our supply throughout the year."
During the quarter, its flagship Snapdragon 888 chipset was spurned by Google's own Tensor chip for the Pixel 6 and Pixel 6 Pro series, but the San Diego-based firm announced its new Snapdragon 8 Gen 1 flagship chip that kicks off a new naming convention for the company. The Motorola Edge X30 was the first phone unveiled with the new SoC inside.
As we just mentioned, QCT is the Qualcomm business segment that is its largest and is the one responsible for mobile components. That division generated $5.98 billion in revenue related to handsets during the fiscal first quarter, a 42% gain from the $4.22 billion in revenue generated by sales related to phones in the year-ago quarter. This indicates strong demand for Snapdragon chips by Android manufacturers.
On Wall Street, Qualcomm's shares had a wacky day. During the regular trading session, the stock rose $11.07 to $188.20 in anticipation of the earnings report. But when the numbers were released, investors were disappointed and the stock slipped $5.70 from the 4 PM EST close to finish the day at $182.50.
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