Qualcomm (QCOM) Q4 2023 annual revenue financial results report

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Cristiano Amon, president and CEO of Qualcomm Incorporated, speaks during an interview with CNBC on the floor of the New York Stock Exchange (NYSE) in New York, April 28, 2022.

Brendan McDermid | Reuters

Qualcomm reported fiscal fourth-quarter earnings on Wednesday that beat expectations for sales and earnings, despite a significant year-over-year decline, and provided a strong forecast for the quarter.

Qualcomm stock rose more than 3% in extended trading.

Here’s how the chipmaker did for the quarter ending September 24 per LSEG (formerly Refinitiv) consensus forecast:

  • EPS: $2.02, adjusted, vs $1.91 expected
  • Income: $8.67 billion, adjusted, compared to $8.51 billion

Qualcomm said it expected adjusted earnings of between $2.25 and $2.45 per share on between $9.1 billion and $9.9 billion in sales this quarter, compared to LSEG’s consensus estimate of $2.23 per share in earnings on $9.2 billion in sales.

At the midpoint of Qualcomm’s guidance, adjusted revenue will grow slightly this quarter compared to last year.

Net income for the quarter was $1.49 billion or $1.32 per share, a 48% decrease from last year’s $2.87 billion or $2.54 per share.

Revenue in the quarter declined 24% year over year from $11.39 billion last year. Total adjusted revenue for Qualcomm’s fiscal year fell 19% from last year to $35.83 billion.

Qualcomm’s fortunes are tied to the smartphone industry, which has been in decline for nearly two years after the Covid pandemic boosted sales. The company makes the processors at the heart of most high-end Android devices and many low-end phones as well.

“We are seeing early signs of stabilization in demand for global 3G, 4G, 5G handsets,” Qualcomm chief financial officer Akash Palkhiwala said on a call with analysts. He said Qualcomm expects total shipments using its handset chips to decline by a “mid-to-high single-digit percentage” in 2023 compared to last year, which is better than the company expected. before this.

Handset chip sales declined 27% to $5.46 billion, above StreetAccount’s forecast of $5.34 billion, from a year earlier. These sales are reported as part of QCT, Qualcomm’s largest division that sells processors, which decreased 26% to $7.37 billion in sales.

The company’s auto business was a bright spot for QCT, increasing 15% year over year to $535 million in sales, beating Wall Street expectations. It’s still a small business but it’s growing as Qualcomm convinces more automakers and component manufacturers to use its chips in cars.

Qualcomm’s “Internet of Things” business, which also includes the chips Meta uses in its Quest headphones, fell 31% year over year to $1.38 billion in revenue.

The company’s profitable licensing business, QTL, reported $1.26 billion in sales, down 12% from last year, according to StreetAccount estimates.

Qualcomm is eager for investors to see it as an artificial intelligence company, as it puts chips with AI features into millions of smartphones, and could benefit from Wall Street’s recent obsession with semiconductor stocks for machine learning.

In October, Qualcomm announced new Android and Windows PC chips with improved AI units called NPUs that could generate AI images much faster than last year’s processors. In a statement, Qualcomm CEO Cristiano Amon drew investors’ attention to the company’s road map for “generational AI and mobile computing performance. “

Earlier this year, Qualcomm said it would continue to supply Apple with 5G modems for handsets through 2026. Previously, analysts had suggested that Apple could use different modems as early as this year . Palkhiwala said the new deal was similar to his previous deal with Apple.

“We are proud of our ongoing relationship with Apple,” said Amon.

Qualcomm said it spent $400 million on share repurchases and $893 million on dividends in the quarter.

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