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Qualcomm down in after-hours trading following mixed earnings

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Qualcomm reported mixed earnings, with the company posting $2.17 EPS and $8.23B in revenue, compared to consensus estimates of $2.09 EPS and $8.25B in revenue.

Video Transcript

SEANA SMITH: We want to get to some breaking news. Qualcomm is out with its results. Jared Blikre has those numbers for us. Jared?

JARED BLIKRE: That's right. Qualcomm is down about 7% in after hours trading, and that's due to a small miss on the top line. Revenue came in for the second quarter-- excuse me, first quarter-- at $8.23 billion. The estimate was for just higher, $8.25 billion. Even if you consider that in line, we know that companies have not been rewarded for beating on earnings and have been punished sometimes when they win. So that's surprising to see this company being punished here.

But it was a big beat on their bottom line. First quarter adjusted EPS coming in at $2.17, estimate was for a slightly lower $0.08 at $2.09. We got some guidance as well for the second quarter. They are seeing adjusted EPS at $1.55 to $1.75. The estimate was for the low end of that range at $1.55.

And then we have the second quarter revenue. Their guidance is for $7.2 to $8 billion, and that is higher than the estimate of $7.1 billion. So really just seeing some weakness there in that top line figure, the revenue figure.

Just breaking it down, then, by the revenue streams for headsets in the first quarter, that came in at $4.2 billion-- yes, $4.2 billion. That's a 79% increase year over year. RF front end was up $1.06 billion, up 157%. Automotive, $212 million, up 44%. IoT, $1.04 billion, up 48%.

And then we have a quote here from Steve Mollenkopf. He's the CEO. And he's saying, "We delivered an exceptional quarter, more than doubling earnings year over year due to strong 5G demand in handsets and growth in our RF front end, automotive, and IoT adjacencies. All of this drove record earnings in our chip businesses."

Just a couple of quick comments here. They do face potentially some margin pressures in these new markets, or these newer markets that they're pursuing like automotive and internet of things, as the margins are lower then, but they really have a solid business with their IP licensing. They basically control a lot of the protocols that are used in handsets, especially in 5G.

So a strong-- overall strong numbers, but I think somewhat anticipated and just coming in a little bit light. Seeing the stock down about 7%. Just looking at the Wi-Fi interactive here, we can see over the last year, up 87%. So a nice steady run up from those March lows. We'll have to see what happens in trading tomorrow, but for now, that miss, kind of, on the top line weighing on the stock here in after hours trading.

SEANA SMITH: Certainly is. All right, Jared Blikre, thanks so much. That stock off just around almost 8%.