Qualcomm Rides China Smartphone Demand to Post Record Q1 Revenue

"Android is driving the growth," Qualcomm Chief Financial Officer Akash Palkhiwala said.

By Reuters | Updated: 3 February 2022 13:08 IST

Qualcomm Rides China Smartphone Demand to Post Record Q1 Revenue

Qualcomm has invested to make sure it is able to deliver to its customers and that supply will improve

Highlights

Qualcomm has benefited from the exit of Huawei in the US
The shifting Chinese market had given Qualcomm "tremendous opportunity”
Qualcomm shares fell about 3 percent in after hours trading

Qualcomm posted record first-quarter revenue on Wednesday and beat Wall Street forecasts for the current quarter, boosted by strong growth in the Android business and demand from China's handset makers.

The US chips firm forecast second-quarter revenue between $10.2 billion (roughly Rs. 76,353 crore) and $11 billion (roughly Rs. 82,341 crore), above analysts' estimates of $9.61 billion (roughly Rs. 71,936 crore), according to IBES data from Refinitiv.

The company has benefited from the exit of Huawei from the smartphone market, which has led other Chinese phone brands — including Xiaomi, Honor, and Oppo — to turn to Qualcomm for their chip needs.

[Sponsored] Samsung Galaxy S24: The Ultimate Camera Phone With Smarter On-Device AI

"Android is driving the growth," Qualcomm chief financial officer Akash Palkhiwala told Reuters. In the first quarter, handset revenues rose 42 percent year-over-year to $6 billion (roughly Rs. 44,916 crore), driven by greater than 60 percent growth in revenues from Snapdragon chipsets for Android devices.

The shifting Chinese market had given Qualcomm "tremendous opportunity... and we're capitalising on it," said Palkhiwala.

He said during an earnings call that the second half of the fiscal 2022 year is "shaping up" like the second half of fiscal 2021, with "very strong year over-year-growth rates."

Microsoft, Qualcomm Partner on Metaverse Chip for AR Glasses

Net income in the first quarter rose to $3.69 billion (roughly Rs. 27,623 crore), or $3.23 (roughly Rs. 240) per share, from $2.51 billion (roughly Rs. 18,789 crore), or $2.17 (roughly Rs. 162) per share, a year earlier. Palkhiwala forecasted over 30 percent of non-GAAP EPS growth in the third quarter.

Still, Qualcomm shares fell about 3 percent in after hours trading as the results were overshadowed by Facebook owner Meta's weaker-than-expected profit and forecast.

"We think investors are somewhat concerned about possible demand pull-in and/or double ordering by its (Qualcomm's) customers due to the industry supply constraint," said Kinngai Chan, an analyst at Summit Insights Group.

Snapdragon 2022 Chips Coming for Chromebooks, Nintendo Switch, Android Flagships

While chip supply constraints that have crippled many industries during the pandemic continue, chief executive Cristiano Amon told the earnings call that Qualcomm has invested to make sure it is able to deliver to its customers and that supply will improve in the second half of 2022.

Revenue in the first quarter was $10.7 billion (roughly Rs. 80,103 crore), compared with analysts' estimates of $10.42 billion (roughly Rs. 78,001 crore), according to Refinitiv IBES data. Its chip segment had first-quarter revenue of $8.85 billion (roughly Rs. 66,248 crore), above analyst expectations of $8.69 billion (roughly Rs. 65,051 crore), according to data from FactSet.

Why is 5G taking so long? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.