Qualcomm Crushes Q2 Expectations With 41 Percent Revenue Leap

Executives say the company’s laser focus on higher end premium mobile devices lead the charge to beat Wall Street predictions for the quarter.

Mobile Android chip leader Qualcomm’s fiscal second quarter earnings pounded Wall Street skeptics with a revenue haul of $11.16 billion — up 41 percent year-over-year — with help from its flagship Snapdragon products installed in higher end, margin-rich devices.

The San Diego-based company shrugged off growing concerns about a softening tech market, showing chip sales up more than 52 percent year-over-year at $9.55 billion. And the company is doubling down on its confidence – predicting Q3 sales of $10.9 billion, which would beat Wall Street guidance of $9.98 billion.

Qualcomm CEO Cristiano Amon emphasized the company’s strong emphasis on placing its tech inside higher end and premium devices and widening its already extensive position inside Samsung devices. “Snapdragon is synonymous with premium flagship Android,” Amon told analysts and media during a conference call. “Even though the market is a little more soft overall, we are not exposed to the lower tier units.”

Mobile handsets, a segment which ballooned 56 percent year-over-year to $6.3 billion, make up the lion’s share of Qualcomm’s market. The automotive market that the company is pinning future growth hopes on is showing promise with $339 million is sales, up 41 percent annually.

Amon seemed most excited about the company’s future prospects with its Internet of Things (IoT) business, which makes affordable, low-power chips and reported 61 percent year-over-year growth to $1.72 billion. “We are well positions to meet our long-term targets and enable the connected intelligent edge,” he said in a statement.

Analysts brought up concerns about Chinese shipping ports being disrupted by current COVID-19 lockdowns. Amon said the company’s lower tier products have the biggest chance of being affected, but its higher end products will continue to produce booming revenue results. “On the demand side, we saw some slight decrease in lower tier units in China,” he said. “Our numbers assume a recovery of COVID in China by the end of the quarter. Obviously, it’s still a fluid situation.”

In after-hours trading, Qualcomm stock shot up 6.3 percent to $143.65. Qualcomm reported a 68 percent spike in adjusted earnings at $2.53 per share for Q2. The company forecasted adjusted earnings of $2.85 per share for the current quarter, which would beat analysts’ predictions of $2.64 per share.