Qualcomm shares getting chipped after the bell on earnings results

CNBC's Josh Lipton reports that Qualcomm shares are taking a hit after the closing bell. With CNBC's Melissa Lee and the Fast Money traders, Guy Adami, Tim Seymour, Dan Nathan and Karen Finerman. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Qualcomm reported first quarter earnings after the bell Wednesday.

Adjusted earnings beat expectations but Qualcomm’s sales were slightly lower than what Wall Street expected, sending the stock down over 7% in extended trading.

Here’s how Qualcomm did, compared to Refinitiv consensus estimates:

Earnings: $2.17 per share, adjusted, versus $2.10 estimated
Revenue: $8.23 billion, adjusted, versus $8.27 billion estimated
Sales were up 63% year-over-year while earnings grew 119%.

Both revenue and earnings showed strong year-over-year growth as Qualcomm’s business has been propelled by smartphones adopting 5G, requiring its chips and intellectual property, as well as an electronics boom during the pandemic.

Qualcomm said that it is planning for between $7.2 billion and $8 billion in sales in the current quarter, a stronger forecast than analysts tracking the stock expected. However, Qualcomm’s forecast sales for its licensing division between $1.25 billion and $1.45 billion in the current quarter, a bit soft compared with analyst expectations of $1.43 billion.

Late last year, Qualcomm said it planned to change the way it reports its business segments to break out sales from handset, radio frequency, automotive and internet of things chips. Those business units were previously reported together in Qualcomm’s “QCT” segment.

Chip sales grew strongly, Qualcomm revealed on Wednesday, propelled by 79% year-over-year growth in handset chips to $4.22 billion in the quarter ending in December. Its RF front-end chips, which Qualcomm sees as strategically important and are used for 5G in conjunction with Qualcomm’s modems, were up 157% year-over-year.

Qualcomm’s business is closely tied to new handsets that use 5G chips. Qualcomm expects high-single-digit growth in phones shipped in fiscal 2021, with between 450 million and 550 million 5G devices hitting shelves during the period. Qualcomm started providing 5G modems for Apple iPhones last fall.

In total, Qualcomm’s chip division, QCT, reported sales in the quarter that were up 81% year-over-year.

In Qualcomm’s QTL licensing division, which drives much of the San Diego company’s profit, sales were up 18% year-over-year to $1.66 billion.

In January, Qualcomm said it planned to buy Nuvia, a chip startup founded by Apple veterans, for $1.4 billion to bolster the technology it uses for its smartphone, laptop, and car chips. Qualcomm said that it expected to spend $190 million on R&D and sales, general, and administrative expenses related to the purchase this year, of which $90 million is share-based compensation.

Wednesday’s report is the first from the chipmaker since it announced last month that CEO Steve Mollenkopf will retire later this year and will be replaced by the company’s current president, Cristiano Amon. Mollenkopf’s retirement comes after seven challenging years, which included legal issues with Apple, the Federal Trade Commission and a hostile takeover attempt from Broadcom.

» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast

Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

https://www.cnbc.com/select/best-credit-cards/

#CNBC
#CNBCTV