Wireless communications firm Qualcomm (QCOM) has reported financial results that beat Wall Street expectations due to an increase in sales of the microchips that power smartphones.
The San Diego-based company reported earnings per share of $2.75 U.S. versus $2.37 U.S. that was forecast among analysts.
Revenue in what was the company’s fiscal first quarter totaled $9.92 billion U.S. compared to $9.51 billion U.S. that was anticipated on Wall Street.
Qualcomm attributed the earnings beat to sales of handset chips that rose 16% from a year earlier.
Looking ahead, Qualcomm said it expects earnings of $1.73 U.S. to $1.93 U.S. per share and revenue of $8.90 billion U.S. to $9.70 billion U.S. for the current quarter.
However, that forecast fell short of consensus expectations that called for earnings of $2.25 U.S. a share for the first quarter of 2024, sending Qualcomm’s stock down 2% as a result.
Qualcomm primarily makes microchips and semiconductors that are used to connect smartphones to cellular networks, as well as the processors found in Android devices.
However, Qualcomm is looking to diversify beyond smartphones to new areas involving chips for personal computers (PCs), motor vehicles and virtual reality headsets.
But smartphones remain the company’s bread and butter, and Qualcomm said it shipped $6.69 billion U.S. in handset chips during the previous quarter, up 16% from a year ago.
However, Qualcomm forecast that sales of its smartphone microchips are likely to be flat in 2024 as sales of the devices slow globally.
Qualcomm added that it spent $800 million U.S. on share repurchases and $900 million U.S. on dividend payments during the last quarter of 2023.
The stock of Qualcomm has risen 7% in the last year to trade at $148.51 U.S. per share.