Qualcomm delivers record Q2 revenue on share gains at Samsung

Qualcomm rung up record revenue and solid earnings for its fiscal second quarter — led by share gains at Samsung and momentum in its diversification strategy to drive mobile technology into new industries.

The better-than-expected results reported Wednesday come as Qualcomm’s shares have fallen around 25 percent so far this year. Investors have worried over Android smartphone weakness in China amid tough government measures to contain COVID-19 outbreaks.

But San Diego’s largest publicly traded company shrugged off those concerns with quarterly results that beat Wall Street’s expectations. Its shares jumped 6 percent in extended trading on Wednesday.

“Qualcomm silenced the critics with a strong report and guidance despite chatter regarding China handset weakness during the quarter,” said Chris Caso, an analyst with Raymond James. “The main source of upside versus expectations was share gains on Samsung’s flagship platform, which carries high Qualcomm

The company reported record quarterly revenue of $11.2 billion, up 41 percent year over year. Adjusted earnings jumped 69 percent to $3.66 billion — or $3.21 per share.

Wall Street analysts on average were expecting revenue of $10.6 billion and adjusted earnings of $2.93 per share for the quarter.

Despite reports of weakness in China, the company’s smartphone business performed well — delivering $6.3 billion in revenue, up 56 percent year over year.

“We now have approximately 75 percent the premium tier processor volume for Samsung’s Galaxy S-22 smartphones, up from about 40 percent in the Galaxy S-21,” said Chief Executive Cristiano Amon in a conference call with analysts. “Samsung’s strategy to adopt Qualcomm for the majority of its volume is significant. It validates our platform leadership, as well as consumer preference for the Snapdragon brand.”

In the past, Samsung has used its own in-house processor in about half of its most advanced smartphones sold globally. Qualcomm also supplies processors to top Chinese smartphone makers including Xiaomi, Oppo and Honor.

In automotive, Qualcomm boosted its backlog of orders to $16 billion, up $3 billion since the prior quarter. BMW, General Motors and Renault are among is major car customers, where it supplies technologies for Advanced Driver Assistance Systems, telematics, digital cockpit, infotainment and connectivity.

Earlier this month, Qualcomm inked a deal with Stellantis, whose 14 brands include Chrysler, Dodge, Fiat, Jeep and Maserati.

In its Internet of Things business, Qualcomm posted quarterly sales of $1.7 billion — up 61 percent year over year. Its processors target far-flung computing devices that connect wirelessly to the Internet cloud, ranging from 5G laptops to smart cities infrastructure.

Qualcomm also is supplying processors for fixed wireless Internet services — where mobile operators aim to compete with cable companies by delivering home Internet over the air. The company is working with 125 companies on fixed wireless access products.

“Qualcomm is at the intersection of transformative. trends They’re generating demand for our broad technology portfolio across virtually every industry,” said Amon. “This is creating strong growth and diversification opportunities beyond handsets.”

Looking ahead, Qualcomm expects revenue for the current quarter of $10.5 billion to $11.3 billion, and adjusted earnings per share in the range of $2.75 to $2.95.

Wall Street analysts were forecasting revenue s of $9.98 billion and $2.60 per share in adjusted earnings in the seasonally slower June quarter.

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