Qualcomm Exceeds Earnings Expectations, Shares Decline on Revenue Forecast

Las Vegas, Nevada — Qualcomm Inc. reported strong earnings on Jan. 10, 2024, during its keynote at CES 2024, surpassing Wall Street expectations due to robust chip sales. However, shares fell in after-hours trading as its revenue forecast for the current quarter fell slightly short of analysts’ predictions.

For the current quarter, Qualcomm forecasts an adjusted earnings per share of $2.70, alongside revenue of $10.3 billion. Analysts surveyed by LSEG, however, expected earnings of $2.67 per share and revenue of $10.35 billion.

In the latest reported quarter ending in March, Qualcomm’s net income rose to $2.81 billion, or $2.52 per share, up from $2.33 billion, or $2.06 per share, during the same period last year. These adjusted earnings exclude costs associated with acquisitions, interest expenses, and share compensation.

Most of Qualcomm’s revenue stems from selling chips for smartphones, particularly for high-end devices from Samsung and Apple, with overall handset chip sales increasing by 12% year-over-year, amounting to $6.93 billion.

Under CEO Cristiano Amon, Qualcomm has been actively diversifying, notably enhancing its automotive and Internet of Things (IoT) businesses. The automotive segment reported a remarkable 59% annual growth, generating $959 million. Meanwhile, the IoT business saw a 27% increase, contributing $1.58 billion in revenue.

Overall, Qualcomm’s semiconductor division, referred to as QCT, observed an 18% year-over-year growth, amounting to $9.47 billion in revenue for the quarter. The other main division, QTL, which earns licensing fees for patented technology, reported flat revenue at $1.32 billion.

Qualcomm remains exposed to tariffs, export controls, and demand fluctuations due to its focus on designing and manufacturing physical hardware. Amon noted that the company is navigating “the current macroeconomic and trade environment” while continuing to invest, having spent $2.7 billion on capital returns in the quarter, including $1.7 billion on share repurchases and $938 million in dividends.