By Tiyashi Datta and Jane Lanhee Lee
(Reuters) -Qualcomm Inc posted record first-quarter revenue on Wednesday and beat Wall Street forecasts for the current quarter, boosted by strong growth in the Android business and demand from China's handset makers.
The U.S. chips firm forecast second-quarter revenue between $10.2 billion and $11 billion, above analysts' estimates of $9.61 billion, according to IBES data from Refinitiv.
The company has benefited from the exit of Huawei Technologies from the smartphone market, which has led other Chinese phone brands - including Xiaomi (OTC:XIACF), Honor and Oppo - to turn to Qualcomm (NASDAQ:QCOM) for their chip needs.
"Android is driving the growth," Qualcomm chief financial officer Akash Palkhiwala told Reuters. In the first quarter, handset revenues rose 42% year-over-year to $6 billion, driven by greater than 60% growth in revenues from Snapdragon chipsets for Android devices.
The shifting Chinese market had given Qualcomm "tremendous opportunity... and we're capitalizing on it," said Palkhiwala.
He said during an earnings call that the second half of the fiscal 2022 year is "shaping up" like the second half of fiscal 2021, with "very strong year over-year-growth rates."
Net income in the first quarter rose to $3.69 billion, or $3.23 per share, from $2.51 billion, or $2.17 per share, a year earlier. Palkhiwala forecasted over 30% of non-GAAP EPS growth in the third quarter.
Still, Qualcomm shares fell about 3% in after hours trading as the results were overshadowed by Facebook (NASDAQ:FB) owner Meta's weaker-than-expected profit and forecast.
"We think investors are somewhat concerned about possible demand pull-in and/or double ordering by its (Qualcomm's) customers due to the industry supply constraint," said Kinngai Chan, an analyst at Summit Insights Group.
While chip supply constraints that have crippled many industries during the pandemic continue, chief executive Cristiano Amon told the earnings call that Qualcomm has invested to make sure it is able to deliver to its customers and that supply will improve in the second half of 2022.
Revenue in the first quarter was $10.7 billion, compared with analysts' estimates of $10.42 billion, according to Refinitiv IBES data. Its chip segment had first-quarter revenue of $8.85 billion, above analyst expectations of $8.69 billion, according to data from FactSet.