Qualcomm predicts an increase in 5G sales and generates the greatest revenue

Qualcomm on Wednesday forecast first-quarter sales ahead of Wall Street estimates as 5G smartphone sales are expected to surge to more than half a billion units over the next year, in part due to new Apple iPhone 12 models is due.

Qualcomm’s shares rose 14 percent in expanded trading.

The San Diego-based company is the largest provider of processors for smartphones and modem chips that connect phones to wireless data networks. The company has invested heavily in developing lucrative 5G technologies to capitalize on them becoming mainstream in mobile phones. That trend is likely to increase with the introduction of Apple’s first 5G phones last month.

Revenue from the company’s top-selling chip segment was $ 4.97 billion (approximately Rs.36,900) for the fourth quarter of fiscal year, compared to FactSet estimates of $ 4.59 billion (approximately Rs.34,100).

Qualcomm returned to a key supplier for Apple this year, supplying chips that the new iPhone 12 models can use to connect to high-speed 5G networks. Apple didn’t provide a forecast for its current quarter sales, making Qualcomm’s chip sales one of the few proxy investors for measuring the progress of the new iPhones.

However, Qualcomm is supplying 5G chips to a wide range of phone manufacturers outside of Apple, which drives sales and earnings growth. Apple’s iPhone launched a month later than usual, and while he didn’t name Apple, Qualcomm chief executive Steve Mollenkopf told Reuters in an interview that new customer contributions were low in the quarter.

“The results we just printed actually have less of an impact than you would normally see with any of the new customers we’re ramping up just because of when they were launched,” he said.

Apple shares rose 0.6 percent after Qualcomm’s results were announced.

Qualcomm announced that 162 million wireless data link chips were shipped in the fourth quarter of fiscal year, compared to FactSet estimates of 155.3 million.

Based on shipments, the average selling price for chips was $ 30.9 (approx. Rs. 2,300), which is over $ 29.3 (approx. Rs. 2,200) in the previous quarter. This is partly because Qualcomm is increasingly comparing its modem and processor chips to radio chips, which are driving up retail prices. Revenue from these radio chips nearly doubled quarter over quarter to $ 852 million (around Rs. 6,300) in the fourth quarter, resulting in adjusted earnings per share of US $ 1.45 (around Rs 100) versus an estimate of $ 1.17 (around 90 rupees) contributed. according to refinitive data.

“This is really the 5G story that plays a huge role in our business,” said Mollenkopf.

Qualcomm expects first quarter chip revenue in the range of $ 6.2 billion (approximately Rs.46,050 billion) to US $ 6.8 billion (approximately Rs. 50,500 billion), ahead of FactSet estimates by $ 5.71 billion (approximately Rs.42,400 billion). .

Qualcomm, which generates most of the profit from its licensing business, said sales on the unit were $ 1.51 billion (approximately Rs.11,200 billion), above FactSet estimates of $ 1.30 billion. USD (around 9,700 billion rupees).

The company expects total revenues for the current quarter of between $ 7.8 billion (approximately Rs. 57,950 billion) and US $ 8.6 billion (approximately Rs. 63,400 billion), compared to analysts’ estimates of 7.15 billion . USD (approx. 53,100 billion rupees) IBES data from Refinitiv.

Mollenkopf told Reuters that the company expects 5G cell phone shipments this calendar year to be overall above the company’s expected range of 175-225 million units. The company also raised its forecast for 5G cell phone shipments in 2021 to a midpoint of 500 million units.

He also said Qualcomm has applied for licenses from the US government to ship chips to Huawei but has not yet received a response from US officials.

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