Qualcomm on Wednesday reported a 140% increase in earnings for its third fiscal quarter and said revenue in the current quarter will beat Wall Street expectations thanks to strong sales of 5G phones and a growing portfolio of other chips.
The San Diego-based wireless pioneer reported net earnings of $2.03 billion, or $1.77 per share, on revenue of $8.06 billion in the quarter ended June 27, compared to $845 million, or 74 cents per share, or revenue of $4.89 billion in the same quarter a year ago.
Shares were up 3.1% to $146.86 in after-market trading following the earnings report, which could alleviate some concerns among investors about the impact of a global chip shortage on the smartphone market.
Qualcomm Chief Executive Officer Cristiano Amon told investors during a conference call that the company’s efforts to secure its chips from multiple manufacturing partners were making progress, with the first shipment of significant volume in the fiscal third quarter and more to come in the coming months.
“We’re still on track to materially improve supply by the end of the calendar year,” Amon said.
On Tuesday semiconductor giant Intel revealed that it would soon begin producing chips for Qualcomm, which outsources its designs.
The company is also benefiting from the exit from the global smartphone market of China’s Huawei Technologies. Huawei’s flagship models did not use Qualcomm chips but its rivals, who are now snapping up market share, mostly do.
Qualcomm has also been working to boost sales of other chips, such as radio-frequency chips that augment its 5G phone processor chips and whose sales have doubled in the past year. Sales are also growing for a variety of chips for cars and for “internet of things,” or IoT, applications.
Qualcomm said on Wednesday it expects sales of those chips to hit $10 billion this fiscal year, up from $6 billion the previous year.
“In addition to leading the 5G transition, we are on pace to deliver $10 billion of annual revenues across RF front-end, IoT and automotive as our business continues to diversify,” said Amon. “Our solutions are fueling the connected intelligent edge that is enabling the cloud economy, and we are seeing unprecedented demand for our technologies as the pace of digital transformation accelerates.”
The company also said it expects adjusted profits of $8.24 per share for its fiscal 2021, nearly double the previous year.
Reuters contributed to this article.