Qualcomm sales beat estimates, but shares drop after downbeat licensing revenue forecast
(Reuters) – Qualcomm (QCOM) on Wednesday forecast sales and profits above analyst expectations as artificial intelligence features helped fuel demand for smartphones, and its share price fell after the bell on expectations of flat revenue from its patent licensing business.
For its current fiscal second quarter, Qualcomm forecast a sales range with a midpoint of $10.75 billion and adjusted profits of $2.80 per share, both above analyst estimates of sales of $10.34 billion and adjusted profits $2.69 per share, according to data from LSEG.
During a conference call with analysts, Qualcomm executives said its lucrative patent licensing business, under which makers of 5G-connected products pay Qualcomm a small fee for its technology, will not have sales growth this year after an agreement with Huawei Technologies expired.
Shares declined 4.8% after the results and executive comments. Investors have been looking for booming payoffs from AI, and Qualcomm’s stock price has rallied 14% so far in 2025, outperforming a gain of about 3% in the S&P 500 (^GSPC).
Qualcomm last year stopped selling chips to Huawei but still retained a license agreement with the Chinese telecoms giant that analysts had estimated contributed 10 cents to 15 cents per share to its profits.
Alex Rogers, Qualcomm’s licensing chief, said when asked about the forecast.
The Huawei discussions are still in play, so the numbers don’t actually include the potential from a renewal with Huawei,
Qualcomm, the world’s biggest supplier of modem chips that connect smartphones to wireless data networks, said last month it had won a major new deal with Samsung Electronics (005930.KS, SSNLF) to provide chips for the South Korean firm’s flagship mobile phones around the world. San Diego, California-based Qualcomm is also working with Microsoft (MSFT) and computer manufacturers to offer a range of laptops and PCs based on its chips.
Kinngai Chan, an analyst with Summit Insights, said :
Expectations were somewhat high going into the print but we think it is justified as Qualcomm has a decent storyline for total addressable market expansion in the PC client market and share gain in the smartphone market with its strong position in the premium tier segment,
Qualcomm reported sales of $11.67 billion and adjusted profits of $3.41 per share for its fiscal first quarter ended December 29. Both were well above analyst estimates of $10.93 billion for sales and adjusted profits of $2.96 per share, according to data from LSEG.
At the midpoints of the ranges, Qualcomm forecast second-quarter revenues of $9.2 billion for its chip business and $1.35 billion for patent licensing. Wall Street had expected $8.90 billion for chips and $1.43 billion for patent licensing, according to LSEG data.
Philip Morris International Inc. (NYSE:PM) shares are trading higher on Thursday after fourth-quarter FY24 earnings result.
The company reported revenue growth of 7.3% year-on-year to $9.71 billion, beating the analyst consensus estimate of $9.44 billion.
The smoke-free business accounted for 40% of the company’s total net revenues, up by 0.7pp versus the fourth quarter last year.
Cigarette and Heated Tobacco unit (HTU) shipment volume in fourth-quarter grew by 1.9% Y/Y, reflecting growth of 5.1% and 1.1% for HTUs and cigarettes respectively.
Adjusted EPS of $1.55 beat the consensus estimate of $1.50.
Adjusted operating margin for the quarter expanded from 33.7% to 36.3%, with $3.52 billion in adjusted operating income.
The company held $4.2 billion in cash and equivalents as of December-end. Net debt totaled $41.47 billion with a net debt to adjusted EBITDA ratio of 2.66.
The company declared a regular quarterly dividend of $1.35 per share, or an annualized $5.40 per share.
Jacek Olczak, Chief Executive Officer, said,
2024 was a remarkable year for PMI. We delivered very strong full-year results driven by the continued growth of IQOS and ZYN in addition to a robust combustibles performance.
“The long-awaited U.S. FDA authorization of all ZYN nicotine pouches currently marketed in the U.S. is further evidence of the compelling science supporting smoke-free products.”
The ZYN nicotine pouches, small sachets containing nicotine meant to be placed between the gum and lip, are the first products of their kind to gain FDA approval.
Outlook: Philip Morris expects FY25 adjusted EPS of $7.04 – $7.17 versus an estimate of $7.03.
Philip Morris sees FY25 net revenue growth of around 6% to 8% on an organic basis, organic operating income growth of 10.5% to 12.5%.
The company sees FY25 capital expenditures of approximately $1.5 billion.
For the first-quarter, adjusted EPS is expected to be $1.58 – $1.63, with an estimate of $1.61.
Price Action: PM shares are trading higher by 9.86% at $143.90 at the last check Thursday.
Peloton Interactive shares jumped Thursday after the exercise equipment maker’s second-quarter revenue and adjusted earnings forecast topped analyst estimates.
Peloton (PTON) said on Thursday that it generated $673.9 million in revenue for the second quarter of fiscal 2025, down 9% from the same time a year ago but above the $655.17 million analyst consensus compiled by Visible Alpha. Peloton lost $92 million in the quarter, larger than the $68.2 million loss analysts had expected.
After accounting for a number of one-time costs, Peloton reported an adjusted EBITDA of $58.4 million, just over double the $27.8 million analysts had expected.
The stationary bike and treadmill maker’s forecast for the current quarter and the rest of the fiscal year also topped estimates. Peloton said it expects adjusted EBITDA of $70 million to $85 million for the third quarter, and $300 million to $350 million for the full year, up $60 million at each end from its previous range. Each topped the $50 million and $275.14 million consensus estimate.
The quarter is Peloton’s first since announcing new CEO Peter Stern in its October report, though the quarter ended a day before Stern officially took over at the start of 2025.
The company said in its quarterly letter to shareholders.
We see significant opportunities ahead, but we have a steep hill to climb to reach sustained, profitable growth,
Peloton shares were up over 14% Thursday, to nearly double their price 12 months ago.
READ the latest news shaping the AI Chips market at AI Chips News
Qualcomm sales beat estimates, but shares drop after downbeat licensing revenue forecast, source
Add comment