June 24, 2024


Unlimited Technology

Qualcomm Gives Strong Forecast, Announces Huawei License Deal

(Bloomberg) — Qualcomm Inc. gave a strong sales forecast for the current quarter, signaling that fifth generation mobile phone services are taking off. The chipmaker also announced a new licensing deal with China’s Huawei Technologies Co.Revenue exclucding certain items will be $5.5 billion to $6.3 billion in the period ending in September, the San Diego-based company said Wednesday in a statement. Analysts, on average, estimated $5.77 billion, according to data compiled by Bloomberg. Including back payments from Huawei, sales will be $7.3 billion to $8.1 billion, the company said. Profit, excluding some items, will be $1.05 to $1.25 cents a share, in line with estimates.

The smartphone industry, which has suffered declining unit shipments since 2016, is pinning its hopes for a rebound on 5G, which will bring faster data speeds for consumers and add connections and services to currently stand-alone electronics. Investors are looking at Qualcomm, whose chips are the main component in smartphones, for assurances that major markets are ready to build out 5G networks as the world economy emerges from the Covid-19 pandemic.Three months ago, the chipmaker said that China, home to the biggest number of phone users, had recovered almost to the level before the virus hit.Shares jumped about 7% in extended trading after closing at $93.03 in New York. Qualcomm’s stock has gained 5.4% this year, trailing a general rally by semiconductor stocks.

Qualcomm said fiscal third-quarter adjusted revenue was little changed from a year earlier at $4.89 billion, compared with an average estimate of $4.8 billion. Net income was $845 million, or 74 cents a share. Excluding certain items, profit was 86 cents, compared with Wall Street’s average estimate of 70 cents.

Qualcomm provides the modems and processors that let handsets connect to networks and turn the data they receive into the smartphone features consumers have come to depend on. The company has said it’s the first to field 5G parts and aims to gain back market share that was eroded as the previous 4G network technology matured and its customers began to look elsewhere.

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