Qualcomm reported record revenue in the first quarter but faces concerns about the accuracy of their numbers reported in China and about being passed over by a major customer, the company said Wednesday during its quarterly report.
A record number of MSM chipsets were sold in the first quarter, up 27 percent year over year to $270 million. Revenue in the first quarter was $7.1 billion, up 7 percent year over year and a record company revenue before tax. Total device sales hit $56.4 billion dollars, Qualcomm President Derek Aberle said.
Earnings per share were $1.34, rising slightly from last quarter.
“We delivered a strong quarter, achieving record quarterly revenues and non-GAAP operating income,” said Chief Executive Officer Steve Mollenkopf.
While positive about the numbers, Aberle also said that some sales may still be unreported and will need to be caught up in the second quarter report. “We continue to believe that some of our Chinese licensees are not reporting all of their sale of licensed products,” he said.
Revenue outlook for Qualcomm’s semiconductor business is down, the company reported in their fiscal earnings, due to “a shift in share among OEMs at the premium tier, which has reduced our near-term opportunity for sales of our integrated Snapdragon processors,” as well as expectations that the Snapdragon 810 processor “will not be in the upcoming design cycle of a large customer’s flagship device,” and increased competition in China.
“China continues to present significant opportunities for us, particularly with the rollout of 3G/4G LTE multimode, but also presents significant challenges, as our business practices continue to be the subject of an investigation by the China National Development and Reform Commission (NDRC),” the company said in its earnings release.
Qualcomm holds $31.6 billion in cash and marketable securities.
Long term growth drivers remain strong, both in cell phones and automotive and Internet of Things, Mollenkopf said. Demand for global 3G/4G devices continues to grow at a healthy rate, he said, due to high replacement rates and migration.