Qualcomm President Cristiano Amon speaks during a press event in January.
Mario Tama/Getty ImagesStock in Qualcomm is climbing steadily after the company said it was going to sell millions of chips for 5G mobile devices as people upgrade their phones.
That implies hundreds of millions more dollars of revenue more than investors had expected. Qualcomm (ticker: QCOM) stock surged more than 10% in the after-hours session on Wednesday, after closing up 2.8% to $128.97.
“Our fiscal fourth-quarter results demonstrate that our investments in 5G are coming to fruition and showing benefits in our licensing and product businesses,” Qualcomm CEO Steve Mollenkopf said.
The chip maker, known for its wireless communication chips for smartphones, reported fiscal fourth-quarter net income of $2.96 billion, which amounts to $2.58 a share, compared with a net profit of $506 million, or 42 cents a share, a year ago.
Adjusted for factors such as acquisition-related charges, and investment impairments, earnings were $1.45 a share, compared with 78 cents in the year-ago quarter.
Revenue climbed 73% to $8.45 billion from $4.81 billion a year ago. Fourth-quarter sales included $1.81 billion, or $1.37 a share, gained from a settlement of an intellectual-property dispute with Huawei, and royalties for sales between March 2020, and June 2020, under a new agreement with the company. Without the settlement agreement, sales were $6.5 billion.
Analysts had expected adjusted earnings of $1.20 a share on sales of $5.94 billion, excluding the settlement revenue. GAAP earnings were expected to be $1.81 a share.
For the fiscal first quarter, Qualcomm said it expects adjusted earnings of $1.95 to $2.15 a share, and sales of $7.8 billion to $8.6 billion. The company said it anticipated GAAP earnings of $1.67 to $1.87 a share. Wall Street had expected first-quarter adjusted earnings of $1.66 a share and sales of $7.15 billion.
Qualcomm said that beginning with the financial statements released Wednesday, the company would break out its revenue for its CDMA technologies segment in terms of the industries or applications where its products are used: handsets, radio frequency front-end, automotive, and the internet of things. Beginning in fiscal 2021, Qualcomm said it would no longer report revenue for the mobile station model segment.
The stock has been on a tear this year, gaining 46% as the PHLX Semiconductor index rose 29%. Over the summer, an appeals court tossed out a prior antitrust ruling against Qualcomm related to a decision not to sell chips to companies such as Apple (AAPL) unless they also licensed its patents.
Write to Max A. Cherney at max.cherney@barrons.com
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November 05, 2020 at 05:30AM
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Qualcomm Stock Surges After Strong 5G Chip Forecast - Barron's
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