Qualcomm shares rise on strong forecast, Huawei agreement
- Qualcomm shares were up more than 12 per cent in extended trading after the company gave a strong sales forecast for the current quarter
- The chip maker also announced a new licensing deal with China’s Huawei Technologies on Wednesday
Revenue excluding certain items will be US$5.5 billion to US$6.3 billion in the period ending in September, the San Diego-based company said Wednesday in a statement. Analysts, on average, estimated US$5.77 billion, according to data compiled by Bloomberg. Including back payments from Huawei, sales will be US$7.3 billion to US$8.1 billion, the company said. Profit, excluding some items, will be US$1.05 to US$1.25 cents a share.
The smartphone industry, which has suffered declining unit shipments since 2016, is pinning its hopes for a rebound on 5G, which will bring faster data speeds for consumers and add connections and services to currently stand-alone electronics.
Investors are looking at Qualcomm, whose chips are the main component in smartphones, for assurances that major markets are ready to build out 5G networks as the world economy emerges from the coronavirus pandemic.
“The recovery that we’d forecast from Covid in the June quarter was stronger than we’d expected primarily on the strength of the developed world and China,” chief executive officer Steve Mollenkopf said in a telephone interview. “And now we’re heading into the second inflection point which is more global launches of 5G.”
Shares jumped to a high of US$106.50 in extended trading after closing at US$93.03 in New York. Qualcomm’s stock had gained 5.4 per cent this year, trailing a general rally by semiconductor companies.