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The handset chip maker stock QUALCOMM Incorporated soars after their quarterly report
QCOM's stock soared in the extended session on Wednesday, as the chipmaker's record quarterly earnings and upbeat outlook blew past Wall Street expectations and the firm assured analysts that demand continues to outpace supply.
While some analysts are concerned that chip stocks are rising and the supply bottleneck is coming to an end, QCOM's Chief Executive Cristiano Amon rejected such concerns during a conference call, saying that the company's projection includes sustained high demand.
"Across the board, demand will continue to outstrip supply," CEO Amon told analysts, with sales increasing by more than 50% in the so-called "mature" business line.
QCOM's core phone business, which showed robust increases in the second quarter and which QCOM's Chief Financial Officer Akash Palkhiwala described as the company's "mature" business in an interview with MarketWatch, is a key driver of those sales. For example, smartphone chip sales increased 56% year over year to $6.34 billion, compared to a $5.91 billion forecast by Wall Street. QCOM's CDMA technologies, or QCT sector includes handset sales.
QCOM expects third-quarter QCT revenues of $9.1 billion to $9.6 billion, including $1.4 billion to $1.6 billion in sales from its technology licensing, or QTL, division. Analysts expected QCT sales of $8.44 billion and a QTL revenue of $1.51 billion.
"Samsung is aggressively selling Snapdragon as an ingredient brand for the Galaxy S22 in many of those regions that are now new markets for QCOM," Amon told investors. "I believe that is a really big data point...I believe we are extremely optimistic that our partnership with Samsung will continue to grow."
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