Qualcomm shares fell despite high sales for the holiday quarter, 5G modem, net profit per share of 119% and revenue growth of 62%. The company warned that “supplies of the chips will remain limited in the first half of 2021” due to the shortage in the semiconductor industry.
Shares of Qualcomm (QCOM), an increase of 82.5% over the last year, fell to 8.3% in Thursday after-hours trading as the company reported lower revenues holiday quarter than analysts expected and warned that “the widespread deficit in the semiconductor industry” will affect the volume of its deliveries.
Qualcomm reports the production of its chips to outsourcing companies such as Taiwan Semiconductor and Samsung Electronics, according to reports in recent months, these providers are not yet able to meet the rapidly increasing global demand for chips.
Apple (AAPL), a major client of Qualcomm, said last week that sales of high-end models of the iPhone 12 is limited by the availability of some components. Earlier Wednesday, General Motors (GM) has warned that the global shortage of semiconductors will lead to a reduction in production this year, which will lead to downtime at three plants automaker.
However, in its report on Wednesday, Qualcomm said it expects a stronger revenue in the second quarter than analysts expect. The future CEO of Qualcomm, Cristiano Amon said that the proposal on the semiconductor market is expected to increase in the second half of 2021. In early January, Qualcomm announced that CEO Steve Mollenkopf will retire in June, his post is the current President Cristiano Amon, c 25-years of experience in the company.
In addition, according to the estimates of the 2021 financial year, growth in the number of sales of 5G smartphones will reach the range from 450 to 550 million. Qualcomm is supplying 5G modems for the iPhone from Apple and other manufacturers of Android.
For the 1st quarter of fiscal 2021 (ending December 27, 2020), Qualcomm reported net profit per share of 119% compared to the last year’s value from $0.99 to $2,17, above analyst estimates of $2,10.
Total revenue grew 63% to $8,23 billion that, on the contrary, below the average analyst expectations of $8,27 Statistics billion quarterly revenue and profit Qualcomm over the past 2 years is available here.
At the same time, sales of chips for mobile devices increased by 79% to $to 4.22 billion, and the external RF chips that Qualcomm considers to be strategically important and which are used for 5G in conjunction with Qualcomm modems, increased by 157% compared to last year. Quarterly revenues from licensing brought $1.66 billion
Forward-looking statements Qualcomm
In the second quarter fin. 2021 Qualcomm expects to generate revenue in the range of $7.2 billion to $8 billion, higher than the average forecast of analysts. Earnings per share is projected at $1,55 – $1,75.
At the same time, Qualcomm forecast sales of licensed units in the current quarter, from $1.25 billion to $1.45 billion, the average of this range is lower compared to analysts ‘ expectations of $1.43 billion.
Last month, Qualcomm said it plans to buy Nuvia, a startup for the production of chips, for $1.4 billion.
After the publication of the report Qualcomm, Morgan Stanley analyst Joseph Moore lowered its price target on the stock from $171,00 to $167,00 with a rating of “overweight” after he witnessed a “disappointing” income and “challenging” quarter as a whole.
At the same time, Moore pointed to the benefits of Qualcomm from the potential problems of a competitor HiSilicon, as well as improving demand for smartphones in 2021.
The analysts wrote: “Leadership at Qualcomm cellular technology (3G / 4G / 5G) puts the company in an advantageous position to maintain the leading market share”.
7 analysts raised price target on shares of Qualcomm after the report
Mizuho Securities analyst Vijay Rakesh responded to the report Qualcomm increase of the target price of its shares from $163 to $170, reiterating a “buy” recommendation.
Rosenblatt Securities raised its target price from $155 to $175;
UBS from $125 to $155;
Bernstein from $175 to $185;
Raymond James from $150 to $190;
Cowen from $170 to $180;
Piper Sandler from $140 to $150.
The average price target of Qualcomm stock is $171,61 that represents the potential growth of 5.74% compared to the last price of $162,30. Among 24 analysts, 17 appreciate Qualcomm shares rated “buy”, seven “hold” and none of them gave a rating of “sell.”