Qualcomm’s shares surged in after-hours trading on Wednesday after the company reported strong fourth-quarter earnings and revenue that exceeded Wall Street’s expectations.
The semiconductor maker also issued an optimistic forecast for the upcoming December quarter.
The company’s stock rose as much as 10% in extended trading before settling with a gain of about 4%. Qualcomm reported earnings per share of $2.69, adjusted for one-time items, surpassing analysts’ expectations of $2.56. Revenue for the quarter came in at $10.24 billion, exceeding the anticipated $9.90 billion. Qualcomm’s net income reached $2.92 billion, or $2.59 per share, a significant increase from $1.49 billion, or $1.23 per share, in the same period last year.
Looking ahead, Qualcomm provided a strong revenue forecast for the current quarter, projecting sales between $10.5 billion and $11.3 billion, with the midpoint of that range above analysts’ expectations of $10.59 billion.
For the full fiscal year 2024, Qualcomm reported total revenue of $33.19 billion, marking a 9% increase from the previous year. The company’s handset business saw a 12% increase in chip sales to $6.1 billion, aligned with market estimates. Qualcomm’s growth in the handset segment was fueled by a more than 20% increase in Android device revenue, driven by new smartphone launches, particularly in China.
Under the leadership of CEO Cristiano Amon, Qualcomm has diversified beyond its traditional smartphone business into areas such as automotive, internet of things (IoT), and AI. The company’s automotive business grew 86% year-over-year, reaching $899 million in sales, and Qualcomm expects a further 50% increase in automotive revenue during the current quarter.
The IoT segment, which includes chips for industrial applications as well as consumer devices like Meta’s Quest handsets and Ray-Ban smart glasses, saw a 22% increase in revenue to $1.68 billion.
In addition to its solid performance, Qualcomm’s board approved $15 billion in additional share buybacks, following the repurchase of $1.3 billion worth of shares in the fourth quarter. The company also returned $947 million to shareholders through dividends.
Qualcomm’s diversified business model, combined with a recovery in the smartphone market and its continued expansion into new industries like AI and automotive, positions the company well for future growth. However, analysts remain focused on how quickly Qualcomm can ramp up its AI and laptop initiatives to offset potential declines in its Apple business, where it continues to supply chips through 2026.
The company’s shares have risen nearly 20% year-to-date, as investors continue to respond positively to its diversified growth strategy and strong performance in key sectors.
