Cristiano Amon, CEO of Qualcomm, confirmed that memory has begun to play a decisive role in determining the size of the mobile phone market during the coming period. He explained that Qualcomm does not buy memory chips directly, but its customers do, which means that their sales may be affected in the next quarter as a result of the lack of supplies.
Qualcomm recorded a strong performance in the first fiscal quarter, exceeding market expectations with revenues of $12.25 billion, with adjusted earnings per share of $3.50. In contrast, analyst estimates were for revenues of $12.21 billion and earnings of $3.41 per share.
The company achieved net profits of $3 billion, equivalent to $2.78 per share, compared to a net profit of $3.18 billion, or $2.83 per share, in the same quarter of last year.
The smartphone chipset sector, which is Qualcomm’s largest division, contributed revenues of $7.82 billion, recording a growth of 3% compared to the previous quarter. In the same context, revenues from intellectual property licenses, including fifth generation patents, amounted to about $1.59 billion.
As for the Internet of Things division, which focuses on low-power chips for industrial uses and smart devices, it recorded a growth of 9%, reaching revenues of $1.69 billion. This included chips used in products such as Meta Ray-Ban smart glasses based on the Snapdragon AR1 processor.
In the automotive sector, growth accelerated remarkably, as revenues rose by 15% to reach $1.1 billion, reflecting the expansion of Qualcomm’s presence in this field.
Despite these positive results, the company’s expectations for the second quarter fell short of market expectations. Qualcomm expected revenues of between $10.2 and $11 billion, with earnings per share between $2.45 and $2.65, while analysts were expecting revenues of about $11.11 billion and earnings of $2.89 per share.
The final expectations are related to the purchasing strategies that smartphone companies will follow, especially with the rise in component costs, which may push them to increase prices and affect sales volume.
On the other hand, leading phones seem more able to overcome the memory shortage crisis thanks to their higher profit margins, which is the sector in which Qualcomm sees itself as the most competitive, according to Amon’s statements.
The company concluded the first quarter by continuing its stock buyback program, purchasing 15 million shares worth $2.6 billion, in addition to distributing cash dividends amounting to $949 million, or $0.89 per share.
