Qualcomm's stock was up on Wednesday after the wireless technology specialist reported a strong fiscal fourth quarter and said it is well positioned for growth in 2021.

According to CNBC, Qualcomm's share price rose more than 11% in extended trading as its revenue and adjusted earnings per share beat Wall Street expectations.

Figure 1: Snapped up: Qualcomm's success is due to investment in 5G, believes CEO Steve Mollenkopf.
(Source: Qualcomm)

For example, compared to Refinitiv consensus estimates, for the quarter ended September 27, Qualcomm reported $1.45 earnings per share (adjusted) compared to the estimated figure of $1.17. Adjusted revenue increased by 35% to $6.5 billioncompared to the estimate of $5.93 billion.

Net income in the fourth quarter grew by a whopping 76% to $1.67 billion, and pre-tax earnings rose by 78% to $1.86 billion.

Steve Mollenkopf, CEO of Qualcomm, said the fiscal Q4 results "demonstrate that our investments in 5G are coming to fruition and showing benefits in our licensing and product businesses."

Cash in your chips

Reuters noted that revenue from the company's chip segment was $4.97 billion in fiscal Q4, compared with FactSet estimates of $4.59 billion.

Qualcomm said it shipped 162 million wireless data chips in fiscal Q4, which Reuters said compares with FactSet estimates of 155.3 million.

Mollenkopf said Qualcomm is well positioned for growth in 2021 and beyond.

"As the pace of disruption in wireless technology accelerates, we will continue to drive growth and scale across our RF front-end, Automotive and IoT adjacencies," he added.

In the 2020 fiscal year, revenue increased 12% to $21.65 billion, while net income rose 11% to $4.8 billion.

The company's fortunes certainly improved in the recent quarter compared to earlier in the year, when measures related to COVID-19 made their mark.

Future forward

Qualcomm also provided guidance for its fiscal first-quarter ending in December. It said that it expected revenue between $7.8 billion and $8.6 billion, and adjusted EPS between $1.95 and $2.15.

CNBC reported that Qualcomm said it expects about 200 million smartphones with 5G to be shipped in 2020, and about 500 million 5G smartphones to be shipped in 2021. The company has previously said it expects global 5G handset shipments this year of between 175 and 225 million.

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Mollenkopf told Reuters the company expects overall 5G handset shipments this calendar year to come in at the top of the company's expected range.

Qualcomm is supplying chips for new 5G iPhone 12 models, among other 5G devices.

Although he did not name Apple, Mollenkopf told Reuters that the contribution from a "new customer" in the quarter was small.

"The results we just printed really include a smaller impact than you would normally see with one of the new customers that we're ramping up, just due to timing of their launch," he told the news agency.

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— Anne Morris, contributing editor, special to Light Reading