Qualcomm posts record sales amid surging demand for 5G smartphones
The company has taken action to assure parts supplies will deliver results, easing bottlenecks
Qualcomm Inc. posted record quarterly sales and forecast further growth amid surging demand for 5G smartphones in the face of supply-chain constraints.
Chief Executive Cristiano Amon, who took the top job in June, said steps the company has taken to assure parts supplies are starting to deliver results and should ease bottlenecks over the coming months.
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The first part of 2022, he said, will still see shortages. "But as we get to the second part of the year, I think, in general, supply and demand are going to be aligned," he said on an earnings call.
The mobile-phone chip giant, whose processors are in many new 5G handsets, said sales rose 12% to $9.3 billion in its fiscal fourth quarter, generating a $2.8 billion profit, exceeding Wall Street expectations. The sales jump came even after the year-ago figure was boosted by a one-time payment of $1.8 billion from a prior licensing settlement with Chinese phone giant Huawei Technologies Co.
Mr. Amon has been pushing the company to grow beyond its traditional mobile-chip business. The company closed the fiscal year with combined revenue topping $10 billion for some of its non-handset growth businesses, including those focused on the automotive sector and internet-of-things devices.
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Qualcomm has said it has taken extra steps to snare chip supply at a time of unprecedented shortages, including having multiple vendors producing the same type of chip to boost supply.
Apple Inc., a Qualcomm customer, last week warned that supply-chain disruptions would become increasingly challenging during the important holiday-shopping quarter.
Intel Corp. Chief Executive Pat Gelsinger has said the chip shortages could last into 2023. ON Semiconductor Corp. CEO Hassane El-Khoury, on an earnings call this week, said, "We expect demand to remain robust and outpace supply through most of 2022."
Qualcomm said sales in the current quarter should reach $10 billion to $10.8 billion.
Chief Financial Officer Akash Palkhiwala said per-share earnings growth in the fiscal year that began in October is expected to exceed 20%, driven by strength across the company’s various hardware segments. Growth in the handset business, he said, would exceed the non-handset segments.
The San Diego-based chip company’s shares, which rose 2.4% Wednesday, advanced more than 6% in after-hours trading following the earnings report.
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The company expects 500 million to 550 million shipments of 5G handsets this year. In the prior quarter, it said it had an upward bias for shipments in the range of 450 million to 550 million units.
As part of Mr. Amon’s push for Qualcomm to be recognized for more than a supply for chips for smartphones, the company last month teamed up with investment firm SSW Partners to acquire Swedish auto-technology company Veoneer Inc. for $4.5 billion. The move bolsters Qualcomm’s autonomous-driving ambitions.