Qualcomm Gets Boost From 5G Smartphone Sales, Licensing Payments
November 04 2020 - 5:10PM
Dow Jones News
By Asa Fitch
Mobile-phone chip-making giant Qualcomm Inc. reported strong
quarterly earnings, boosted by Apple Inc.'s new iPhone 12 and other
smartphones capable of connecting to superfast 5G networks.
Qualcomm, a leading supplier of the chips powering 5G equipment,
generated $8.3 billion in revenue in the last quarter, a 73% jump
from the year-earlier quarter. The figure included a one-time
payment of $1.8 billion from a prior licensing settlement with
Chinese phone giant Huawei Technologies Co. [
Even stripping out the Huawei agreement, sales rose 35% from the
year-prior. The sale of the newest 5G smartphones have been a
bright spot for handset makers in a market that otherwise has been
lackluster since the pandemic hit.
Telecommunications providers and analysts are betting that
Apple's launch last month of several 5G-capable phones will give a
boost to demand for such services. "Until now, most people have
taken a wait-and-see approach to 5G. They've been waiting for 5G to
get real," Verizon Communications Inc. CEO Hans Vestberg said at
Apple's virtual launch event, adding the iPhone 12 "the wait is
over."
Qualcomm is expected to be a major beneficiary of Apple's 5G
phones. Chief Executive Steve Mollenkopf said the company's revenue
for the quarter ended in September reflected some of those sales
but would be more substantial in later quarters.
Qualcomm posted $2.58 in earnings per share for the most recent
quarter, more than quadrupling the year-ago figure because of the
Huawei payment. Earnings were also up when excluding that
payment.
"Our investments in 5G are coming to fruition and showing
benefits in our licensing and product businesses," Mr. Mollenkopf
said in a statement.
The results came in above Wall Street expectations. Analysts
expected $5.9 billion in sales excluding the Huawei payment and
per-share earnings of $2.23, according to a FactSet survey.
The San Diego-based company's shares rose more than 2.5% in
after-hours trading Wednesday.
Qualcomm forecast per-share earnings of $1.67 to $1.87 on sales
of $7.8 billion to $8.6 billion for the current quarter -- also
beating Wall Street's projections.
Write to Asa Fitch at asa.fitch@wsj.com
(END) Dow Jones Newswires
November 04, 2020 16:55 ET (21:55 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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