Qualcomm Wednesday estimated current-quarter income largely consistent with expectations as it signed more contracts for 5G phones, which use higher-priced chips, at a time when the COVID-19 pandemic has disrupted manufacturing channels and led to a fall in demand for smartphones.
The company additionally beat Wall Avenue estimates for second-quarter revenue and revenue on the back of higher costs for its cellular chips, sending its shares up 5% in trading after the bell.
Qualcomm estimated total revenue of between $4.4 billion and $5.2 billion for its third quarter. Analysts had estimated revenue of $4.89 billion, based on IBES data from Refinitiv.
However, the corporate’s scope was in contrast to other chip manufacturers, along with Intel and Texas Instrument who have cut their revenue forecasts, citing the impact of the virus on demand and supply networks.
Qualcomm, the world’s greatest supplier of modem chips that join mobile phones and different devices to data networks, stated coronavirus reduced demand for handsets by some 21% in the second quarter from a year prior, and forecast 30% reduction in handset cargo in the current quarter.
Plunge in device sales means less revenue and income for Qualcomm, as it makes most of its profit from licensing its technologies that allow telephones to connect with wireless data networks.