Qualcomm Inc. QCOM 6.25% posted strong quarterly earnings and gave an upbeat sales outlook, underscoring that demand for chips for everything from smartphones to cars remains elevated.
“Demand remains strong across all of our technologies and continues to exceed supply,” Qualcomm Chief Executive Cristiano Amon said on an analysts call. Supply shortages are improving, he said, but bottlenecks are expected to persist.
The company on Wednesday said it generated $10.7 billion in sales and $3.4 billion in net income in the most-recent quarter, surpassing Wall Street expectations.
Qualcomm, which projects revenue of up to $11 billion for the current quarter, joins other chip companies to report strong results over the past 10 days, as semiconductor demand outpaces supply. Advanced Micro Devices Inc. CEO Lisa Su said Tuesday that revenue from chips that go into servers would be the main driver of about 31% top-line growth this year, though all its businesses are projected to see higher sales. Intel Corp. and Samsung Electronics Co. gave a bullish outlook this year.
Chip companies also are seeing prices rise from a combination of inflationary pressures across the global economy and heated semiconductor demand.
“I have a very firm view that this is really a reset of the industry,” Kurt Sievers, CEO of NXP Semiconductors NV, this week said on an earnings call. “I do not think that things will go backward,” he said, “neither the input costs nor our pricing to our customers.”
Qualcomm shares, which rose 6.25% in regular trading after AMD’s results excited investor sentiment in chip companies, retreated in after-hours trading following the results.
Mr. Amon has set ambitious growth targets for the company and laid out plans to expand beyond supplying mobile-phone makers for which the company is best known.
Handsets, though, remain core to Qualcomm’s results. Sales in that segment advanced 42% in the most recent quarter from the year-ago period amid strong demand for 5G devices. Qualcomm estimates more than 750 million 5G handsets will be shipped world-wide this year.
The global smartphone market grew by nearly 6% in 2021 with 1.35 billion smartphones shipped, according to the International Data Corporation’s Worldwide Quarterly Mobile Phone Tracker.
Apple Inc. which regained its title as the world’s No. 1 seller of smartphones per IDC data, last week logged record quarterly results as CEO Tim Cook said supply bottlenecks should ease. Google parent Alphabet Inc. this week posted strong profit growth driven by its ad business while also noting the strongest quarter for Pixel smartphone sales.
Qualcomm also is betting heavily on the growing use of chips in cars, including through an agreement to buy Swedish auto-technology company Veoneer Inc. Qualcomm’s automotive sales in the most recent quarter, which doesn’t include Veoneer yet, advanced 21%.
Write to Meghan Bobrowsky at Meghan.Bobrowsky@wsj.com
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Appeared in the February 3, 2022, print edition as ‘Qualcomm Profit Beats Expectations Amid Chip Crunch.’
