Qualcomm’s shares received a high boost in extended trading on yesterday, July 25 and the chip-making company has planned to repurchase $30 billion in stock.
This boost came right after Qualcomm reported its quarterly results that have surpassed expectations. As for the repurchasing plan, it is an upward revision out of the repurchase program of $10 billion that was announced back in May by the company.
This buyback move will succeed for Qualcomm given that a self-imposed deadline of concluding the acquisition deal of NXP expires. In this case, Qualcomm will need to pay $2 billion to NXP.
The quarterly report reveals the firm’s revenue amounting to $5.6 billion, whereas analysts expected it to be $5.19 billion. Qualcomm stated that this was a 4% growth of its revenue as compared to last year.
Majority of it is earned from the company’s CDMA Technologies business that makes chips for phones and other devices. $4.09 billion in revenue was earned by the business unit in the fiscal third quarter, which reflected strong demand from the Chinese device makers. George Davis, the Chief Financial Officer for the company added that it reflected lower demand from Apple.
For the fiscal fourth quarter, Qualcomm’s expectations include earnings of 75-85 cents per share without certain items. This is supposed to generate $5.1 billion to $5.9 billion in revenue. According to analysts, the numbers could be 76 cents and $5.45 billion.
We believe Apple intends to solely use our competitors’ modems rather than our modems in its next iPhone release. We will continue to provide modems for Apple legacy devices. – George Davis, Chief Financial Officer at Qualcomm
Company President Cristiano Amon echoed the same, adding that it will not take part in Apple’s next product launch.