Qualcomm (QCOM) earnings Q2 2022

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Qualcomm President and CEO Cristiano Amon speaks about Qualcomm’s digital chassis for automakers during a press conference during CES 2022 in Las Vegas, Nevada on January 4, 2022.

Steve Marcus | Reuters

Qualcomm reported second-quarter results Wednesday after the bell, beating Wall Street expectations for sales and earnings, and pushing the stock up more than 4% in extended trading.

Here’s how Qualcomm fared against Refinitiv consensus expectations:

  • EPS: $3.21, adjusted, vs. $2.91 expected, up 69% year-over-year
  • Revenue: $11.16 billion adjusted, vs. $10.60 billion expected, up 41% year-over-year
  • QCT (selling chips): $9.55 billion vs. $8.86 expected by StreetAccount, up 52% ​​year-over-year
  • QTL (technology license): $1.58 billion vs $1.55 expected by StreetAccount, down 2% year-over-year
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Qualcomm said it expects earnings per share of between $2.75 and $2.95 in the third quarter on about $10.9 billion in sales. The company’s forecast is stronger than the $9.98 billion sales forecast expected by Wall Street.

Qualcomm makes most of its money from selling processors and modems for smartphones and licensing technology for connecting to cellular networks. Its strong results on Wednesday come amid broader market skepticism of chip companies in 2022, which have benefited from strong demand and limited supply during the Covid-19 pandemic.

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Under CEO Cristiano Amon, Qualcomm has emphasized to investors that it can be a chip supplier for many additional markets and can diversify away from its bread-and-butter handset chip business.

Qualcomm’s four major chip markets rose in the quarter ending March.

Handsets, the biggest market for Qualcomm chips, rose 56% year on year to $6.33 billion, suggesting that a potential slowdown in smartphone sales in an inflationary environment has not yet hit the leading chipmaker Android.

Front-end RF, a company focused on selling a part that enables 5G connections, grew 28% to $1.16 billion.

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The automotive market segment remains small in terms of sales today, but the company remains optimistic about securing partnerships with automakers and suppliers that will lead to greater growth down the line. Qualcomm recorded $339 million in auto sales, up 41% year-on-year. Revenues from Veoneer were not included in the March quarter, although Qualcomm is finalizing the acquisition in the current quarter.

The IoT business, which makes low-power, low-cost chips, grew 61% to $1.72 billion.

Qualcomm said it paid $764 million in cash dividends and repurchased $951 million of its stock during the quarter.

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