Qualcomm's first-quarter revenue was $9.5 billion, net profit was $2.2 billion, down 34% year-on-year;

Tencent Technology News News on February 3, local time in the United States on Thursday, Qualcomm released the company's financial report for the first fiscal quarter of fiscal year 2023 as of December 25, 2022 after the US stock market. According to the financial report, Qualcomm's revenue in the first fiscal quarter was $9.463 billion, down 12% year-on-year; Net income was US$2.235 billion, down 34% year-over-year; Diluted earnings per share were $1.98, down 34% year-over-year. After the earnings report, Qualcomm shares fell more than 3% in after-hours trading.

Focus

1. Qualcomm's revenue in the first fiscal quarter fell by 12% year-on-year and net profit decreased by 34%, mainly affected by the macroeconomic environment and the increase in channel inventory.

2. Qualcomm's mobile phone chip business became a bright spot, although revenue fell 18% year-on-year, but above analysts' consensus expectations of $5.2 billion.

3. As demand in the mobile phone industry continues to decrease, Qualcomm expects the rise in channel inventory levels to continue at least until the first half of 23.

4. Qualcomm expects revenue in the second quarter of fiscal 2023 to be between $8.7 billion and $9.5 billion, less than the average analyst expectation of $9.55 billion.

1. Key points of financial reporting

Both revenue and net profit declined

Qualcomm's first-quarter revenue was $9.463 billion, down 12% from $10.705 billion in the year-ago quarter and below analysts' consensus expectations of $9.6 billion. Non-GAAP adjusted revenue for the first quarter was $9,456 million, down 12% from $10,697 million in the year-ago quarter.

Qualcomm's first-quarter operating profit was $2.465 billion, compared to $3.864 billion in the year-ago quarter;

Qualcomm's first-quarter net profit was $2.235 billion, down 34% from $3.399 billion in the same period last year. On a non-GAAP basis, Qualcomm's adjusted net income for the first quarter was $2,684 million, down 27% from $3,686 million in the year-ago quarter.

Qualcomm's diluted earnings per share for the first quarter were $1.98, down 34% from $2.98 in the year-ago quarter and below analysts' consensus expectations of $2.34. Non-GAAP adjusted diluted earnings per share for Qualcomm's fiscal first quarter were $2.37, down 27% from $3.23 in the year-ago quarter.

By specific business unit

Qualcomm's first-quarter CDMA Technology Group (QCT) revenue was $7,892 million, down 11% from $8,847 million in the year-ago quarter. Pre-tax profit was $2,183 million, down 30% year-over-year from $3,114 million in the year-ago quarter. The pretax margin was 28 percent, down 7 percent from 35 percent in the year-ago quarter. thereinto

— Revenue from the headset business was $5,754 million, down 18% from $6,989 million in the year-ago quarter.

— Revenue from Automotive was $456 million, up 58% from $288 million in the year-ago quarter.

— Revenue from IoT was $1,682 million, up 7% from $1,570 million in the year-ago quarter.

Qualcomm's Technology Licensing Group (QTL) revenue for the first quarter was $1.524 billion, down 16% from $1.818 billion in the year-ago quarter. Pretax profit was $1,117 million, down 21% from $1,406 million in the year-ago quarter. The pretax margin was 73 percent, down 4 percent from 77 percent in the year-ago quarter.

3. Costs and expenses increased slightly

Qualcomm's total operating costs and expenses were $6,998 million in the fiscal first quarter, compared to $6,841 million in the year-ago quarter. thereinto

— Cost of revenue was $4,044 million, compared to $4,303 million in the year-ago quarter;

— R&D expenditure of $2,251 million, compared to $1,930 million in the year-ago quarter;

— Selling, general and administrative expenses of $623 million, compared to $608 million in the year-ago quarter;

— Other expenses were $80 million, compared to zero in the year-ago quarter.

4. Cash flow growth

Qualcomm's operating cash flow for the fiscal first quarter was $3,095 million, compared to $2,057 million in the year-ago quarter. As of December 26, 2022, Qualcomm had total cash and cash equivalents of $5,073 million, compared to $6,607 million at the end of the first quarter of fiscal 2022.

Qualcomm returned a total of $2.1 billion in cash to shareholders in the first quarter of fiscal 2023, including $842 million, or approximately $0.75 per share, in the form of cash dividends. The company also repurchased 11 million shares of its common stock and returned $1.3 billion in cash to shareholders.

5. Executive comments

Cristiano Amon, President and CEO of Qualcomm, said: "In a challenging environment, we achieved performance consistent with our guidelines, including year-over-year growth in QCT Automotive and IoT. The long-term trend in demand for differentiated technologies and solutions that drive our digital transformation remains intact. We believe we have the ability to navigate the situation in the short term and remain focused on executing our diversification strategy. “

Second, the interpretation of financial reports

Qualcomm said that in the first fiscal quarter ended Dec. 25, the company's revenue fell 12% year-on-year and net profit fell 34%, mainly due to the macroeconomic environment and increased channel inventory affected performance.

Qualcomm's CDMA technology group, which includes smartphone chips, RF front-end components, automotive chips and IoT devices, saw first-quarter revenue of $7.89 billion, down 11% year-over-year and also below analysts' consensus expectations of $8.03 billion.

In this segment, mobile phone chip revenue was $5.75 billion, down 18% year-over-year but above analysts' consensus expectations of $5.2 billion. IDC, a technology industry research firm, estimates that global smartphone shipments fell 18% in the fourth quarter of 2022, the largest decline on record.

Qualcomm CEO Cristiano Amon said on a conference call with analysts: "As demand from the mobile phone industry continues to decrease, we now expect the rise in channel inventory levels to continue at least through the first half of 23." Demand is weakest in the low-to-mid-end market. ”

Amon also said that compared with 2022, the global economy and the shutdown of the epidemic have prompted industry executives to be optimistic about 3G, 4G and 5G mobile phone shipments in 2023. Given the current economic and demand environment, the company is cutting expenses further.

Qualcomm's technology licensing division, which includes the right to use the company's cellular patents, saw revenue of $1.52 billion, down 16% year-over-year and slightly below analysts' consensus expectations of $1.54 billion. Amon said Qualcomm is working with PC makers on platform design for consumer and business devices.

3. Performance outlook

Qualcomm expects revenue in the second quarter of fiscal 2023 to be between $8.7 billion and $9.5 billion, averaging $9.1 billion, below analysts' average expectations of $9.55 billion.

By business segment, Qualcomm expects CDMA Technology Group to have fiscal second-quarter revenue of approximately $7.4 billion to $8 billion and technology licensing group revenue of between $1.25 billion and $1.45 billion.

Qualcomm also expects diluted earnings per share in the company's fiscal second quarter to be in the range of $1.53 to $1.73. On a non-GAAP basis, Qualcomm expects diluted earnings per share in the fiscal second quarter to be $2.05 to $2.25, averaging $2.15 and falling short of analysts' consensus expectations of $2.26. (Golden Deer)

Stock price movements

On Thursday, local time in the United States, Qualcomm shares fell $2.61, or 1.89%, to close at $135.85 per share in regular trading on the Nasdaq exchange. In subsequent after-hours trading, Qualcomm shares fell another $4.3, or 3.17%, to $131.55.

Over the past 12 months, excluding after-hours volatility, Qualcomm shares have fallen 28%, while the S&P 500 has fallen 9% over the same period. Over the past 52 weeks, Qualcomm's highest price was $192.1 and its lowest price was $101.93. Based on Thursday's closing price, Qualcomm's market capitalization is about $151.77 billion. (Golden Deer)