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 email@example.com
(END) Dow Jones Newswires