Qualcomm earnings top Wall Street expectations

Qualcomm (QCOM) reported first-quarter earnings that beat Wall Street expectations on both the top and bottom lines. The company posted $9.92 billion in revenue, topping an expected $9.54 billion. Adjusted earnings per share of $2.75 also surpassed estimates of $2.36. In addition, the company posted its forecast for the current quarter, saying revenue will be between $8.9 billion and $9.7 billion.

Yahoo Finance Anchors Josh Lipton and Julie Hyman break the latest developments for the company and what it means for it going forward.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

JULIE HYMAN: Qualcomm, that company out with its numbers just in the past few moments. First quarter adjusted earnings per share coming in at $2.75. That's versus the 2.36 that analysts had been anticipating. Adjusted revenue in the first quarter $9.92 billion. That, too, ahead of estimates. And then we got some second-quarter estimates as well-- second-quarter forecasts, I should say, from the company.

Second-quarter revenue going to be 8.9 to $9.7 billion. Analysts had estimated 9.36 billion on that basis. And the company says second-quarter earnings per share are going to be in the range of 2.20 to 2.40 the estimate was 2.26. So I guess if you take the midpoint of 2.20 to 2.40, you get 2.30, which is above where analysts had been anticipating.

But you see the shares bouncing around a little bit in the after hours. I also want to point out, what we saw on the sector level, because Qualcomm has really been trying to diversify. Its bread and butter is smartphone chips, right? It is a big Apple supplier among others. But it has been trying to diversify away from that market as well. So I just want to point out what we're seeing in terms of the breakdown of the revenue streams here.

So handset revenue rising 16% year-over-year here to 6-- call it $6.9 billion. The automotive segment, that's been one of its fastest growth segments, up 31% to $598 million. And then finally internet of things has been another growth segment there. But there, it saw revenue fall by 32% to about $1.14 billion.

So those are the various business lines. Josh, what do you make of the numbers as we look at this, and what we kind of want to find out from Qualcomm?

JOSH LIPTON: Yeah. So Qualcomm, one of those names, by the WAY who in the last few months really saw a big move into this print. And the initial reaction here in the after hours, investors like what they see. Listen, they are the biggest maker of phone processors, so it's going to be really interesting to hear more about how they see the smartphone market, which has been lackluster, but how do they see playing out in 2024. Color and commentary, what are the growth drivers.

As you noted, too, Julie, they have made real efforts here to diversify their business, right, pushing into these new areas like the PC, where they have talked a big game, really kind of how they stack up against rivals like Apple and Intel. And I think China will be interesting as well. This is another company where China is an important market. And, obviously, shaky economy over there, geopolitical tensions, how do they navigate that, too.

JULIE HYMAN: Yeah, we didn't get any-- all of this will come on the call, right, when we get more color on all of this. But, you know, Cristiano Amon, who is the CEO of the company, not giving a lot of discussion about that. But he did talk about what we are seeing driven by on-device generative AI across handsets, automotive PC, and industrial IoT among other things. So we'll get more from the call.

JOSH LIPTON: Yeah. Nice pop at least initially after hours.

JULIE HYMAN: Unlike what we saw for, say, an AMD, for example, or the other big tech earnings we got yesterday.