U.S. smartphone chip maker Qualcomm on Wednesday posted results from its third fiscal quarter that beat analyst expectations thanks in part to the strength of its business in China.
The company posted net income of $1.44 billion on $6 billion in revenue for the June quarter, for increases of 22 percent and four percent, respectively. Qualcomm also posted earnings of $1.16 per share, handily beating Wall Street expectations of around 98 cents per share.
Qualcomm CEO Steve Mollenkopf said the results came courtesy of “meaningful progress with licensees in China” as well as “a strong new product ramp across tiers, particularly with fast growing OEMs in China.”
Despite initial difficulties in China following a $975 million fine levied on the company for alleged anti-monopoly violations there, Mollenkopf said Qualcomm’s licensing business now has more than 110 companies signed up for licenses consistent with the terms of its resolution with Chinese officials.
Mollenkopf also said China is helping to boost financial performance in its QCT group, with “favorable demand” for its new chipsets for the mid- and high-end smartphone tiers. Demand is especially strong among the top 10 vendors in China, he said.
The company said it estimates global shipments of 3G and 4G devices will reach between 1.625 billion and 1.725 billion, with year-over-year growth of approximately eight percent. Qualcomm president Derek Aberle said the company is seeing a “strong 4G ramp in China as each of the operators pursues aggressive subscribe growth targets with their 4G plus service offerings.”
According to Mollenkopf, the company is also on track to meet its goal of slashing $1.4 billion in spending under its strategic realignment plan. The company is expecting more than $700 million in savings in fiscal year 2016, he said, which is $100 million more than Qualcomm’s original $600 million target.
Qualcomm issued guidance for its fourth fiscal quarter estimating between $5.4 billion and $6.2 billion in revenues.
Qualcomm stocks were up 7.76 percent as of 11:25 a.m. ET on Thursday on the news.
