Chip designer Qualcomm has forecast first-quarter sales and profits above Wall Street targets as a smartphone sales slump finally starts to ease, especially in China, and a renewed contract with Apple helps boost its outlook.
The San Diego, California-based company forecast current-quarter revenue of $9.1 billion to $9.9 billion, with a midpoint above analysts' expectations of $9.2 billion according to LSEG data.
For the just-ended fiscal fourth quarter, Qualcomm reported sales of $8.67 billion and adjusted profits of $2.02 per share, both above analysts' estimates of $8.51 billion and $1.91 per share, according to LSEG data. Analysts also expect major Qualcomm customer Samsung Electronics to resume using some of its own in-house chips after using all Qualcomm chips in its most recent devices.
"For Qualcomm, it is a recovery in Android demand mostly driven by significant growth in demand from Chinese OEMs," said Logan Purk, analyst at Edward Jones. Fourth-quarter sales in Qualcomm's chip unit were $7.4 billion, beating analysts' estimate of $7.26 billion according to FactSet data.