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Qualcomm stock surges as results, outlook top street on 5G strength

Qualcomm Inc. shares rallied in the extended session Wednesday after the chip maker’s quarterly results and outlook blew away Wall Street estimates as it benefits from 5G product rollouts.

Qualcomm QCOM, +2.80% reported fiscal fourth-quarter net income of $2.96 billion, or $2.58 a share, compared with $506 million, or 42 cents a share, in the year-ago period. Adjusted earnings were $1.45 a share, compared with 78 cents a share in the year-ago period.

Revenue rose to $8.35 billion from $4.81 billion in the year-ago quarter, but Wall Street analysts estimate adjusted revenue, which excludes Qualcomm’s Strategic Initiatives investment segment. Adjusted revenue rose to $6.5 billion, compared with $4.8 billion in the year-ago period.

Analysts surveyed by FactSet had forecast earnings of $1.17 a share on adjusted revenue of $5.9 billion, while Qualcomm had forecast earnings of $1.05 to $1.25 a share on adjusted revenue of $5.5 billion to $6.3 billion.

Shares surged 7% after hours, following a 2.8% rise in the regular session to close at $128.97.

Much has changed over the past year for Qualcomm. In August, a U.S. appeals court overturned an antitrust ruling against Qualcomm, right after the company announced it had finally settled a licensing dispute with Chinese smartphone maker Huawei Technologies Co. Plus, Apple Inc. AAPL, +4.08% rolled out its first wave of 5G phones in October, more than a year and a half after Qualcomm and Apple settled their licensing dispute.

“Our fiscal fourth quarter results demonstrate that our investments in 5G are coming to fruition and showing benefits in our licensing and product businesses,” said Steve Mollenkopf, Qualcomm chief executive, in a statement. “We concluded the year with exceptional fourth quarter results and are well positioned for growth in 2021 and beyond.”

Apple’s new 5G iPhones, along with pushes to 5G smartphones from other manufacturers, are expected to drive gains for Qualcomm in its new fiscal year.

Qualcomm said it expects adjusted fiscal first-quarter earnings of $1.95 to $2.15 a share on adjusted revenue of $7.8 billion to $8.6 billion, while analysts had forecast $1.69 a share on revenue of $7.14 billion. For the 2021 fiscal year, Qualcomm did not provide guidance but the Street estimates $6.52 a share on revenue of $28 billion. Market Watch

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