Qualcomm Shares Surge As Q2 Earnings Beat Analyst Estimates Despite Pandemic

The shares of QUALCOMM, Inc. QCOM surged in the after-hours session on Wednesday as the company reported better-than-expected earnings for the second quarter.

What Happened

Qualcomm posted total revenue of $5.2 billion, 5% higher than the $4.98 billion posted in the same quarter last year. It beat the Refinitiv analyst consensus estimate of $5.025 billion by 3.4%.

The GAAP earnings per share were 88 cents, up 14% from last year's 77 cents, and beat Refinitiv analyst estimate average of 78 cents.

For the third quarter, Qualcomm said it expects a revenue between $4.4 billion and $5.2 billion and earnings per share between 60 cents and 80 cents.

The chipmaker said the uncertainty caused by the novel coronavirus (COVID-19) pandemic makes it harder to give guidance, but it expects the overall handset market to be down 30% over its previous expectations. This will cause a loss of at least 30 cents to the EPS, it added.

Qualcomm kept to its previous forecast of 175 million to 225 million for 5G smartphone deliveries in the financial year 2020.

"Total demand will depend on the speed of the economic recovery," the San Diego-based company's chief executive officer Steve Mollenkopf said on the earnings call, according to MarketWatch. "However, we see no change in our calendar year 2020 5G smartphone forecast."

"As we look to the second half of calendar 2020, while there are a few regions with minor delays in 5G network deployments, overall 5G is progressing as planned and we continue to be well-positioned to drive the rapid adoption of 5G globally," he added.

Price Action

Qualcomm shares traded 3% higher in the after-hours session at $81.35 on Wednesday. The shares had closed the regular session 4.9% higher at $78.97.

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