August 11, 2021 8:00 AM
 — 
3
 min

Qualcomm triples quarterly profit

buy

Qualcomm's revenue rose 65% year-on-year to $ 8.06 billion from $ 4.89 billion, beating market consensus of $ 7.53 billion. Qualcomm's net profit for the fiscal quarter ended June 27 was $ 2.03 billion. or $ 1.77 per share, up from $ 845 million, or $ 0.74 per share, in the same period the previous year. Earnings excluding one-off factors were $ 1.92 per share, compared with $ 0.86 per share a year earlier. The indicator exceeded both market expectations of $ 1.68 and management's forecast of $ 1.55-1.75 per share on revenue of $ 7.1-7.9 billion.

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Revenue for the wireless and mobile semiconductor business, which makes 5G chips in particular, increased 57% to $ 3.86 billion. Mobile antenna chip sales more than doubled to $ 957 million. Qualcomm, profit excluding one-off factors in the next (fourth financial) quarter will be $ 2.15-2.35 per share, revenue - $ 8.4-9.2 billion. Analysts estimate earnings at $ 2.03 per share on revenue of $ 8. 46 billion

In early August, it became known that Qualcomm had made an offer to buy Veoneer, which specializes in the production of software and equipment for autonomous driving. Veoneer's product line includes radars, lidars, thermal night vision cameras, computer vision systems, and advanced driver assistance, safety and autonomous driving software. Qualcomm has long sought to diversify its revenue growth outside of the mobile segment, particularly in the automotive market. The deal underscores the company's commitment to entering the automotive market, namely the fast-growing segment of autonomous driving. The deal will be a great addition to the Snapdragon Ride portfolio, which is focused on developing self-driving technologies.

Among the potential catalysts that can have a positive effect on Qualcomm's capitalization are the following: 1). generating high revenues and expanding MSM (ASP) through the rollout of next-generation 5G networks 2). promotion of related products in non-mobile verticals 3). growth in market share with other OEMs due to restrictions on Huawei's operations in the United States. We think Qualcomm looks attractive at the current valuation. We believe that the market does not fully account for the growth potential of Qualcomm's business scale due to the loss of Huawei's market position.

Qualcomm's is the world’s leading supplier of mobile device chipsets (mobile phones, smartphones, tablets) and realizes another ~25-35% of total company revenue through its Technology Licensing business (QTL), which receives royalties payments from FRAND licensees of the company’s extensive CDMA and OFDMA-based patent portfolio.

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