Qualcomm
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Qualcomm reported robust sales and profits for the fourth quarter, exceeding Wall Street expectations, on strong chip sales to flagship Chinese smartphone makers and guided sales and EPS for the first quarter that came in above consensus estimates.

Revenues for the fourth quarter rose 19% to $10.24 billion, with net income climbing 96% to $2,920 billion or $2.59 a share, as per a company release.

The results topped Refinitiv consensus expectations of $9.90 billion revenue and $2.56 EPS.

Revenues from Qualcomm CDMA Technologies (QCT) segment, which sells wireless chipsets, increased 18% to $8.68 billion. Revenue from handsets grew 12% to $6.096 billion, as the recently launched Snapdragon 8 Elite gained strong design traction, with successful launches at Xiaomi, Honor, Oppo and Vivo. Qualcomm expects additional launches at Samsung, ASUS and more.

Revenues from Qualcomm Technology Licensing (QTL) segment, which licenses Qualcomm's patent portfolio to telecom equipment and consumer electronics manufacturers, advanced 21% to $1.521 billion.

For the first quarter, Qualcomm expects revenue between $10.5 billion and $11.3 billion and non-GAAP diluted EPS of $2.85 - $3.05. The midpoint of expectations of $10.90 billion revenue and EPS of $2.95 topped Wall Street estimates of $10.59 billion and $2.86, respectively, according to data from LSEG, NBC reported.

Qualcomm, the top smartphone chips provider, is well-positioned to benefit from the customer upgrades to smartphones equipped with AI technologies like chatbots and image generators, Reuters reported.

Qualcomm's most recent fiscal year saw 46% of its revenue from firms having headquarters in China. Executives, however, brushed aside rumors that worries about possible tariffs under re-elected US President Donald Trump were the reason for the spike in sales from China.

"Trump's policies do pose a risk to the broader semiconductor industry, but it remains to be seen if he allows a China takeover of Taiwan and if aggressive tariffs are implemented," said Angelo Zino, vice president and senior equity analyst at CFRA Research.

Under the direction of CEO Cristiano Amon, Qualcomm has proactively diversified its product line beyond smartphones by venturing into developing markets for PC, automotive, and industrial chip manufacturing.

Automotive revenue climbed 68% to $899 million on strong demand for Snapdragon Cockpit Elite and Snapdragon Ride Elite platforms for current and future multimodal AI and assisted driving workloads.

The company said leading car manufacturers are adopting Snapdragon Elite automotive platforms for their future software-defined vehicles, including Li Auto and Mercedes-Benz.

Internet of Things (IoT) revenue increased 22% to $1.683 billion

"We will continue to transform Qualcomm from a wireless communications company into a connected computing company for the age of AI," Qualcomm CEO Cristiano Amon said on the earnings call with analysts.

The expiration of Qualcomm's contract to sell processors to Apple through 2026 has raised fears about a reduction in revenue. Losses are anticipated to be mitigated, though, by the company's foray into laptops and artificial intelligence as well as robust sales from Chinese Android brands like Xiaomi, Oppo, and Vivo. Growth will also be supported by Qualcomm's recent licensing arrangement with Shenzhen Transsion Holdings.

The company also revealed a substantial $15 billion stock repurchase program.

Shares of San Diego, California-based Qualcomm gained 6% in extended trade on Nasdaq to $183.90. The stock closed Wednesday's regular trading session at $172.99, up 4.27%.

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