Qualcomm Reports Higher Revenue, Issues Mixed Outlook

By Asa Fitch 

Qualcomm Inc. reported higher fiscal first-quarter revenue, bolstered by a strong performance in its technology-licensing arm, but its bottom line suffered absent a one-time boost in the year-ago period.

The San Diego-based company, which designs and markets semiconductors mostly for mobile-communications equipment, on Wednesday said sales were $5.08 billion during the quarter ended in December, up 5% compared with the same period the year prior.

Adjusted earnings per share fell 18% to 99 cents, higher than what Wall Street expected based on analysts surveyed by FactSet. Profit in the previous year's first quarter was helped by an adjusted $552 million benefit from U.S. tax reforms passed in 2017.

Like its peers in the cellphone supply chain, Qualcomm grappled with lower global smartphone sales last year. Many consumers are waiting to purchase new handsets to take advantage of superfast fifth-generation cell networks that operators are building out.

But Chief Executive Steve Mollenkopf said Qualcomm was reaping early gains from the rollout of the new networks. "Our strong fiscal first-quarter financial performance reflects a significant inflection point for Qualcomm," he said.

Qualcomm also benefited during the last three months of 2019 from bumper sales of Apple Inc.'s latest iPhones. The company collects royalties from patents it licenses Apple and other handset maker. Qualcomm's licensing arm generated $1.4 billion in sales in the quarter, up by 38% compared with a year ago, even as its chip division sales fell 3% year-over-year.

The chip maker issued a mixed outlook for the current quarter. Chip shipments could fall to between 125 million and 145 million, from 155 million in the first quarter. Qualcomm said sales should be $4.9 billion to $5.7 billion, compared with Wall Street expectations of $5.1 billion.

Shares in the company rose around 1% in after-hours trading.

Write to Asa Fitch at [e-mail]

(END) Dow Jones Newswires

February 05, 2020 16:57 ET (21:57 GMT)

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