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Why Qualcomm Stock Skyrocketed 13.3% Today

By Rich Smith – Nov 4, 2021 at 10:38AM

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Qualcomm just beat on earnings and crushed on guidance.

What happened

Shares of semiconductors giant Qualcomm (QCOM -1.55%) jumped 13.3% through 9:45 a.m. EDT Thursday after the company reported a big earnings beat for its fiscal fourth quarter 2021 last night.

Analysts had forecast Qualcomm would earn $2.26 per share on sales of less than $8.9 billion. In fact, Qualcomm earned $2.55 per share (pro forma), and on sales of more than $9.3 billion.  

Three dimensional numbers that spell out "2022," with a green arrow rising upward.

Image source: Getty Images.

So what

Qualcomm's profit as calculated according to generally accepted accounting principles (GAAP) wasn't quite as big as that pro forma figure above suggests -- but it was close. In fact, GAAP profits actually declined 5% year over year at Qualcomm, to $2.45 per share. Nevertheless, investors are cheering the 76% rise in pro forma profits, and the 12% increase in revenue year over year.

Additionally, Qualcomm turned in exceedingly strong numbers for fiscal 2021 as a whole. For the year, sales were up 43%, and GAAP earnings up 74% at $7.87 per share. (Pro forma profits showed a nice improvement as well, more than doubling year over year.)

Now what

And Qualcomm CEO Cristiano Amon assured investors that more good news is coming. "We are well positioned to continue to lead in mobile and enable the digital transformation of industries with our broad portfolio of relevant technologies [including] RF front-end, Automotive and IoT," said the CEO.

In fiscal Q1 2022 in particular, management is forecasting total revenue of between $10 billion and $10.8 billion (so revenue up 27% at the midpoint). GAAP profits are predicted to range from $2.53 to $2.73 per share (up 24%), and pro forma profits will range from $2.90 to $3.10 -- well ahead of analyst predictions.

No wonder investors are cheering.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Qualcomm. The Motley Fool has a disclosure policy.

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