QUALCOMM, Inc. (NASDAQ: QCOM) stock fell over 8.6% on 4th Feb, 2021 (as of 9:51 am GMT-5; Source: Google finance) after the company posted mixed results for the first quarter of FY 21 as semiconductor supply constraints that have roiled the industry were hampering its sales growth.
Qualcomm CDA Technologies, which accounts for the bulk of the company’s revenue, did even better with sales of $6.533 billion, which represents an increase of 81% from a year ago. For the first time, Qualcomm broke out revenue within QCT by segment, saying that its handset sales grew by 79%, to $4.216 billion. It also reported that its RF front-end chips, which are used to enable 5G along with its modems, saw sales rise $157%, to $1.06 billion. IoT revenue rose 48%, to $1.044 billion, and automotive added an additional $212 million in sales, up 44%. Qualcom said its Qualcomm Technology Licensing segment, which is the part of its business that licenses its technology patents, saw revenue of $1.66 billion, up 18% from the same period one year ago.
3d illustration of a glowing blue Qualcomm logo sitting on top of a glossy microchip
QCOM in the first quarter of FY 21 has reported the adjusted earnings per share of $2.17, beating the analysts’ estimates for the adjusted earnings per share of $2.10. The company had reported the adjusted revenue growth of 62 percent to $8.24 billion in the first quarter of FY 21, missing the analysts’ estimates for revenue of $8.27 billion.
Meanwhile, the company is building out businesses supplying chips to automakers such as General Motors, which last week disclosed a deal to source chips from Qualcomm, and challenging Intel Corp with new processors for laptop and desktop computers. Two of the company’s newer business lines, that includes radio frequency chips to help devices handle newer 5G signals and internet-of-things chips for devices such as wireless headphones – have now become billion-dollar-per-quarter businesses
In addition, the company’s subsidiary, Qualcomm Technologies, Inc., has signed into a definitive agreement to acquire NUVIA for approximately $1.4 billion before working capital and other adjustments. The transaction will take place subject to customary closing conditions, including regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
Additionally, the company has returned $1.2 billion back to stockholders in the first quarter, including $739 million worth of cash dividends and another $444 million via a repurchase of 3 million shares of common stock.
For the second quarter, Qualcomm is confident it will enjoy further growth, with a forecast of between $7.2 billion and $8 billion in sales, well above Wall Street’s forecast of $7.1 billion in second quarter revenue.