Qualcomm Posts a Blowout Quarter; Shares Jump 7.5%

Qualcomm Incorporated (QCOM) reported better-than-expected fiscal Q4 results. The semiconductor company also provided upbeat fiscal Q1 guidance on the back of elevated demand for chips, which are used in phones, cars, and other internet-connected devices.

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Following the news, shares rose 7.5% in the extended trading session on Wednesday, after closing 2.4% higher on the day.

Adjusted earnings rose 76% to $2.55 per share in Q4, easily beating Street estimates of $2.26 per share. Notably, EPS results outpaced the company’s guidance range of $2.15-$2.35 per share.

In other positive news, total adjusted revenues surged 43% year-over-year to $9.32 billion and surpassed the consensus estimate of $8.86 billion. Revenues at the QCT (wireless chipset technology) segment came in at $7.7 billion, up 56% year-over-year, fueled by growth in handsets, RF front-end, automotive, and IoT products. Additionally, the QTL (Qualcomm Technology Licensing) segment recorded revenues of $1.6 billion, up 3%.

For fiscal 2021, adjusted earnings more than doubled from the prior year to $8.54 per share. Adjusted revenues also jumped 55% to $33.5 billion.

During the quarter, the company repurchased 5 million shares for an aggregate amount of $771 million and paid dividends worth $768 million.

Guidance

During the earnings call, Qualcomm CEO Cristiano Amon said, “Going forward, our chipset business represents the largest growth engine for us as virtually all devices at the edge adopt mobile technologies. We have the relevant technologies required to continue to lead in mobile and the connected intelligent edge. And as the edge gains scale in connectivity and adopts own device artificial intelligence, we’re well positioned to become a leader in AI processing.”

For first-quarter fiscal 2022, total revenue is anticipated to be in the range of $10 billion to $10.8 billion versus analysts’ estimates of $9.7 billion. Adjusted EPS is expected to be between $2.90 and $3.10, versus the consensus estimate of $2.60. (See Qualcomm stock charts on TipRanks)

Wall Street’s Take

Following the fiscal Q4 results, Mizuho Securities analyst Vijay Rakesh reiterated a Buy rating on the stock and increased the price target to $170 (22.76% upside potential) from $165.

Rakesh believes that Qualcomm is well-positioned for a multi-year 5G rollout.

Meanwhile, Wall Street analysts are cautiously optimistic about the stock. The Moderate Buy consensus rating breaks down into 8 Buy and 3 Hold ratings. The average Qualcomm price target stands at $181.67 and implies upside potential of 31.19% to current levels. Shares have gained 7.4% over the past year.

Smart Score

Qualcomm scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. (See Top Smart Score Stocks on TipRanks)