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Qualcomm reported a healthy set of numbers for the quarter ending March with its smartphones chip sales growing 56% year-over-year.
On Wednesday, April 27, chipmaking giant Qualcomm Inc (NASDAQ: QCOM) reported its earnings for the March quarter (Q2 2022). The company succeeded in beating past analysts’ expectations on sales and earnings.
As a result, the QCOM stock surged more than 6% in an extended trading session on Wednesday. Qualcomm reported a 69% jump in year-over-year EPS at $3.21, against the Street expectations of $2.91. It also reported a 41% jump year-over-year in revenue which stood at $11.16 billion.
The chip sales division of Qualcomm witnessed a 52% year-over-year growth at $9.55 billion. A majority of the profits for Qualcomm come from the sales of its processors and modems from smartphones. Besides, it also earns revenue through licensing technology that connects to cellular networks.
During the pandemic period, chip companies witnessed major growth in business. There’s been strong demand in the market but limited supply has also given these companies the pricing power. Furthermore, Qualcomm CEO Cristiano Amon has been steering ahead the company instilling more confidence among investors.
He also stated that Qualcomm can diversify further to additional markets apart from its regular smartphone chip business.
Qualcomm Continues to Lead in Smartphone Chip Sales in Q2 2022
During the quarter ending March, Qualcomm managed to deliver strong sales across all four chip markets. But smartphones, which is the biggest market for Qualcomm, grew 56% on an annual basis. Qualcomm clocked $6.6 billion worth of chip sales for its smartphone business. The robust demand shows that concerns of an inflationary environment have still not kicked in.
Another business RE-Front End focusing on selling parts for 5G connection surged 28% to $1.16 billion. As of date, the automotive market is relatively smaller for Qualcomm in terms of sales. But the company remains optimistic due to its growing partnerships with automakers and suppliers. Thus, the company expects this segment to boost the bottom line over the next few years.
Qualcomm reported a 41% jump in its automotive sales at $339 million. This quarter, Qualcomm will also be closing the acquisition of Veoneer, a company that specialized in automotive technology. Qualcomm’s IoT business which looks after making low-cost, low-power chips also registered a 61% growth to $1.72 billion.
During the last quarter, Qualcomm paid $764 million in cash dividends. QCOM stock has corrected significantly in 2022 amid the broader market correction. QCOM stock is down 27% year-to-date.