US-based chipmaker Qualcomm reported a 3% increase in net profit in the fourth quarter, driven by double-digit growth in the company’s equipment and services arm.
California society of the company net income for the quarter ended Sept. 25 jumped to nearly $2.9 billion, nearly $75 million more than the same period last year.
The company’s revenue in the July-September period jumped 22% on an annual basis to nearly $11.4 billion, the company said in a statement.
Its equipment and services division contributed 86% of total revenue. It jumped 28.4% to $9.8 billion last quarter, while licensing revenue fell 6.7% year on year to nearly $1.6 billion.
Qualcomm’s diluted earnings per share jumped 4% to $2.54.
“We are delighted to report another strong year, despite macroeconomic challenges, as we continue to execute on our strategy to transform Qualcomm from a wireless communications company for the mobile industry into a connected processor company for the smart edge,” said the company’s president and CEO. said executive Cristiano Amon.
Following the earnings announcement, Qualcomm shares fell nearly 7% to $104.8 per share after hours trading. The stock, which closed down 4.1% at $112.5 on Wednesday, has fallen more than 18% in the past 12 months.
Qualcomm’s annual net profit jumped 43% a year to $12.9 billion, while sales soared 32% to $44.2 billion during the period.
Qualcomm is one of the world’s leading wireless technology innovators and the driving force behind 5G network expansion. Its technologies are found in almost all 3G, 4G and 5G smartphones.
Given the uncertainty caused by the macroeconomic environment, the company has updated its forecast for 3G/4G/5G handset volumes from a percentage decline to single digits year-over-year to a double-digit percentage decline.
Rapidly deteriorating demand and easing supply constraints in the semiconductor industry have led to higher channel inventories, Qualcomm said.
“As a result of these elevated levels, our largest customers are now drawing down inventory, negatively impacting the midpoint of our first-quarter fiscal 2023 EPS guidance of approximately $0.80.” , he added.
Qualcomm expects its revenue for the first quarter of fiscal 2023 (October-December) to range between $9.2 billion and $10 billion. He expects his diluted earnings per share to fall to between $1.72 and $1.92.
“While our financial outlook is temporarily impacted by high channel inventory, our diversification strategy and long-term opportunities remain unchanged,” Mr. Amon said.
The global semiconductor industry had its toughest time last year as a surge in sales of electronic devices during the Covid-19 pandemic sparked higher-than-expected demand, leading to a severe shortage in industry.
Qualcomm’s research and development spending jumped 16% a year to $2.2 billion in the fourth quarter. This represented nearly 20% of the company’s total revenue in the September quarter.
Its cash, cash equivalents and marketable securities totaled more than $6.3 billion as of September 25.
Updated: 02 November 2022, 21:48