Smartphone demand gives Qualcomm revenue a massive shot in the arm

Smartphone demand - Qualcomm Snapdragon processor for mobile

The company’s revenue spiked by 52 percent, driven primarily by handset shipments.

Smartphone demand over the last year has sent Qualcomm revenues and share prices skyward as the chipmaker saw massive fiscal second quarter earnings.

The company’s recent earnings report substantially exceeded analyst estimates for the quarter.

The company’s share prices rose 6 percent on the news of its fiscal Q2 earnings in 2021. The company’s high revenues are credited to the massive smartphone demand as a result of the global pandemic.

Qualcomm saw an adjusted $1.90 per share, when compared to what Refinitiv analysts had been expecting at $1.67 per share in earnings. In terms of revenues, the company brought in a much higher $7.93 billion when compared to the predicted $7.62 billion that analysts from Refinitiv had been expecting.

The Qualcomm revenues grew by 52 percent on an annualized basis in Q2 from smartphone demand.

The fiscal quarter ended on March 28. Ahead of the pandemic, reduced handset shipments had made last year’s figures show a lower growth than usual. However, as the pandemic crisis continued, strong shipments, particularly in China, changed those results. In fact, the Q1 quarter saw a revenue growth of 63 percent for a similar reason.

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Among the most profitable segments of the company was the Qualcomm Technology Licensing segment. It includes handset patent royalties, and it brought in $1.61 billion of the company’s total revenue. That represented a 51 percent year over year increase.

Handset chips and 5G network deployment drive much of Qualcomm’s revenues. These are also areas that regularly open substantial opportunities for growth. This is particularly true at the moment as economies start opening up once more and people begin traveling again in terms of daily commutes and longer-distance trips.

Smartphone demand sent Qualcomm’s handset revenue up by 53 percent to $4.07 billion. That said, FactSet analysts had been predicting a slightly higher growth rate Smartphone demand - Qualcomm Snapdragon processor for mobileat $4.23 billion. The bigger Qualcomm CDMA Technologies Segment – including handsets and radio frequency front end, automotive components and internet of things – generated $6.28 billion in revenue, which was beyond the FactSheet analyst prediction of $6.26 billion.

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