Qualcomm's 2Q Sales, Profit Surge

By Maria Armental

Qualcomm Inc.'s sales in the March quarter rose a higher-than-expected 52%, capitalizing on greater demand for superfast 5G phones.

Company officials said they expect material improvements by year's end on supply-chain shortages that have weighed on sales.

The mobile-phone chip maker reported nearly $8 billion in sales in the second quarter, while profit surged to $1.76 billion.

Analysts surveyed by FactSet expected a profit of $1.63 billion on $7.62 billion in sales.

Earnings per share were $1.53, and adjusted earnings were $1.90 a share.

While licensing revenues are only a fraction of chip sales, the segment has been a key profit driver because it generates higher margins.

Revenue in the licensing business rose 51% in the latest quarter, while sales rose 53% in the chip business.

Qualcomm had pointed to the seasonality of the chip business, with a strong start of the year driven by 5G flagship launches including Apple, but said supply constraints remained a drag on sales.

On Wednesday, it reported more than $4 billion in sales of chips for handsets and again surpassed $1 billion in quarterly sales of chips that go into internet-of-things devices.

In the third quarter, Qualcomm projects $7.1 billion to $7.9 billion in sales, compared with analysts' consensus estimate of $7.12 billion, according to FactSet.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

April 28, 2021 16:29 ET (20:29 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.