“We have supply,” says Qualcomm CEO Cristiano Amon. Official Qualcomm photo

Qualcomm on Wednesday forecast better-than-expected profits and revenue for its current quarter on soaring demand for chips used in phones, cars and other internet-connected devices.

The San Diego-based wireless pioneer, which is the biggest supplier of chips for mobile phones, has worked to diversify its chip portfolio. Its optimistic forecast came even as smartphone makers such as Apple have been struggling with supply chain issues and reporting uneven results.

Following Qualcomm’s forecast, the company’s shares rose 3.6% in after-hours trading.

Qualcomm said it expects adjusted earnings per share to grow between $2.90 and $3.10 per share for its first quarter, beating estimates of $2.59 according to IBES data from Refinitiv.

Qualcomm Chief Executive Officer Cristiano Amon told Reuters that efforts undertaken earlier this year to secure additional chip supplies have been successful and are on track.

“It’s reflected in our record Q1 guidance — it means we have supply,” Amon said in an interview.

During a conference call with investors, Chief Financial Officer Akash Palkhiwala said Qualcomm expects fiscal 2022 adjusted profit growth of more than 20%. The forecast implied adjusted earnings of $10.25 per share, higher than estimates of 12.5% growth to $9.29 per share, according to Refinitiv IBES estimates.

The company also said it expects revenue with a midpoint of $10.40 billion for its fiscal first quarter, which includes the holiday shopping season in the United States and Europe, compared with analyst estimates of $9.68 billion.

The upbeat forecast could signal the easing of a global chip shortage that has hit production for a number of major Qualcomm customers, including Apple and Samsung Electronics.

Qualcomm defied broader supply chain issues, even as one of its biggest customers, Apple, missed Wall Street expectations for iPhone sales. Apple Chief Executive Tim Cook told Reuters the issues were poised to grow worse on a dollar basis during the holiday shopping quarter.

Qualcomm has worked to diversify its chip manufacturing partners, which are called foundries. It is one of few chip designers that uses both Samsung Electronics and Taiwan Semiconductor Manufacturing to make dueling versions of its cutting-edge chips. For older technologies it leans of a network of suppliers including TSMC, United Microelectronics and China’s Semiconductor Manufacturing International.

“I find it interesting that the company grew this much during a supply-constrained environment. Some have said that Qualcomm’s multi-foundry approach was too complex, but now it’s looking very smart,” said Patrick Moorhead, head of Moor Insights & Strategy.

Amon told Reuters the booming results came in part because many of Qualcomm’s customers have been gobbling up the Android phone market share left open by Huawei Technologies’ exit from the smartphone market. Huawei phones had used proprietary chips, but most of the rivals now gaining shares are Qualcomm customers.

“The company is no longer defined by a single relationship. We have an incredible opportunity for growth in Android,” Amon said.

The chipmaker said revenue rose 43% to $9.32 billion for the quarter ended Sept. 26, compared with the projection of $8.86 billion. It earned $2.55 per share, on an adjusted basis, exceeding analyst expectations of $2.26.

Its chip segment had fourth quarter revenues of $7.73 billion, above analyst expectations of $7.27 billion, according to data from FactSet.

For decades, Qualcomm’s biggest business was selling the modem chips that connect smart phones to wireless data networks. While that market remains its biggest, other markets such as radio-frequency chips, automotive chips and internet-of-things chips accounted for more than $10 billion of its $27 billion of chip revenue in fiscal 2021.

“If 38% (of chip revenue) doesn’t do it, I don’t know what does,” Amon said of the company’s diversification effort.

Show comments