Qualcomm Overcomes Macro Headwinds with 37% Rise in Q3 2022 Sales

UTC by Bhushan Akolkar · 2 min read
Qualcomm Overcomes Macro Headwinds with 37% Rise in Q3 2022 Sales
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Despite strong results, the QCOM stock took a 4% dive as the company hinted at a slowdown for the fiscal fourth quarter which could impact its earnings.

On Wednesday, July 27, Qualcomm Inc (NASDAQ: QCOM) reported its Q3 earnings for fiscal 2022 delivering better-than-expected results.

Qualcomm Q3 2022 Earnings

Qualcomm reported a 37% jump in revenue at $10.93 billion, against the expected $10.88 billion. Similarly, the company reported a 53% year-over-year jump in EPS at $2.96 against the expected $2.87.

Qualcomm CEO Cristiano Amon said that the company has managed to deliver strong results despite “challenging macroeconomic environment”. The chipmaker’s biggest business vertical has been selling processors and modems for smartphones.

During the last quarter, Qualcomm reported a 59% jump in its smartphone business to $6.15 billion, on an annual basis. Similarly, Qualcomm’s automotive chips business grew 38% on an annual basis to a new all-time high of $350 million. Also, its IoT business, which looks after making low-power chips for connected devices grew 31% to $1.83 billion. Speaking of the development, Amon said:

“We are pleased to report strong quarterly results, with record QCT Automotive and IoT revenues in a challenging macroeconomic environment. We are also excited to announce the extension of our patent license agreement with Samsung and the expansion of our strategic partnership to deliver leading premium consumer experiences for Samsung Galaxy devices. Qualcomm is well positioned to be the company bringing advanced connectivity, data processing and intelligence to the edge, enabling cloud-edge convergence.”

Fiscal Fourth Quarter Outlook

For the fiscal fourth quarter, Qualcomm suggested that the company’s handset sales are likely to slow down. This suggests a decline in its smartphone business which could impact the company’s revenue as well as earnings.

During the fiscal fourth quarter, the company expects its operating expenses to rise anywhere between 6% to 8%. Akash Palkhiwala, the CFO at Qualcomm, said that the company’s fourth-quarter weakness would only reflect in the middle and lower times. It will not impact chips in the most expensive phones.

Furthermore, Qualcomm is confident that it is still on track to seeing its handset business slightly below 50% this year. Qualcomm’s handset business still remains the fastest growing as the company tries to diversify into other kinds of chips.

But amid a weaker fiscal fourth quarter outlook, Qualcomm stock (NASDAQ: QCOM) stock tanked 3.6% in the aftermarket hours. As of Wednesday’s closing, the QCOM stock was trading at $153.42. The stock is still trading 18% down year-to-date. Qualcomm said that during the last quarter, it had spent $1.3 billion on shareholder return. This also includes $842 million of dividends.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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