Qualcomm (QCOM) Posted Stronger Results, Came On The Heels Of Rising 5G Demands

Qualcomm Incorporated’s (QCOM) stock continued surge for second consecutive day on Thursday as investors welcomed a 76 percent increase in quarterly profit and 35 percent earnings announced after ring of the bell on Wednesday. The company also gave the current quarter a much better outlook than Wall Street forecasts.

The company’s shares, which have risen by 46% since the beginning of the year, rose significantly by 16.44% on Thursday, as the company reported substantially better-than-expected fourth quarter results as well as above Wall Street estimates forecast for first quarter of fiscal 2021.

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The business posted an 86 percent rise in earnings per share to $1.45 for the quarter ended September 30, higher than the analysts’ estimate of $1.17 while rose by 76 percent in the same quarter a year ago.

The company’s overall quarterly revenue increased by 35 percent to $6.5 billion, compare to average analysts’ estimate for the same was $5.93 billion.

The quarterly revenue from the selling of chips soared by 38 percent to $5 billion, and the patent licencing company (which mobile manufacturers pay to the company for using its chip technology) took in $1.5 billion, which is 30 percent more than a year ago.

Commenting on Qualcomm’s quarterly report, analysts noted that the world’s largest chip maker is benefiting from the move from 4G smartphones to modern 5G devices for consumers.

Qualcomm CEO Steve Mollenkopf highlighted in a press release that the progress achieved in diversifying the company’s sales beyond the telecommunications amounted to $3.67 billion for the entire 2020 financial year. Those include revenues from the selling of chips to car manufacturers and Internet-of-Things (IoT) device makers.

The company expects revenues to rise in a range of $7.8 billion to $8.6 billion in the first quarter of fiscal 2021 that will end on December 31, 2020. The average value of that revenue is forecast to increase by around 60 percent compared to the first quarter of 2020. Analysts’ average estimate for the same is revenue of less than $7.13 billion.

The company expects earnings per share in the current quarter in the range of $1.95 to $2.15, an average value of more than double to that of last year, and also above the estimates of analysts who are in estimates of $1.68.

In the coming fiscal year, the company expects the industry’s shift to 5G telecommunications equipment and devices to continue revenue growth.

The company is intending expanding its competition with Intel (INTC) and Marvell Technology (MRVL) in the supply of chips in wider 5G markets.

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