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Qualcomm Inc. (QCOM) is the world’s leading wireless technology innovator and the driving force behind the development, launch and expansion of 5G networks. In addition to smartphones, the company’s technologies are widely used in the automotive sector and other areas where different technologies need to communicate.
The company generated about 80% of its revenue from its equipment and services division, and 20% of its revenue from licensing during the first quarter of 2021. In terms of customer concentration, a significant portion of the company’s revenues are concentrated with four licensees that accounted for 16%, 16%, 15% and 13% of revenue during the quarter.
Qualcomm reported second-quarter revenue that rose by 52.7% to $7.94 billion, beating consensus estimates by $320 million, with non-GAAP earnings coming in at $1.90 per share, beating consensus estimates by 23 cents. The company’s third-quarter guidance was mixed with better-than-expected revenue and worse-than-expected non-GAAP earnings.
Analysts also remain optimistic. Canaccord analyst T. Michael Walkley reiterated his buy rating on the stock in late-April, citing recovering smartphone demand and easing supply constraints, as well as the company’s long-term exposure to the 5G investment cycle. That said, there is some concern over Apple’s possible plans to develop its own 5G modems.
The company raised its quarterly dividend by 4.6% to $0.68 per share, which represents a 2.14% forward yield. The dividend is payable on June 24, 2021, to shareholders on record as of June 3, 2021.
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