With the return of Apple as a client and the momentum at the rear of 5G smartphones, Qualcomm was anticipated to report huge revenue and earnings quantities for the quarter finished Dec. 31.

The San Diego company did just that on Wednesday, particularly on the financial gain entrance.

Fiscal 2nd quarter income strike $8.235 billion, up 62 percent from the exact same quarter previous calendar year and the next maximum on record underneath Normally Approved Accounting Ideas.

Qualcomm earned $2.455 billion, or $2.12 for every share, for the quarter under GAAP — a 165 % get in excess of the prior 12 months.

Modified earnings, which exclude sure expenses, came in at $2.17 per share, in advance of Wall Street analysts’ consensus estimate of $2.06.

Nonetheless, the company’s shares tumbled 6.7 per cent in immediately after-hrs investing, probably mainly because revenue was somewhat beneath the $8.27 billion approximated by Wall Street analysts.

Qualcomm provides processors and technology to smartphones and other related units. It could have sold far more, said President Cristiano Amon. But it was held again a little bit for the reason that of provide constraints at the world’s chip-producing factories, which are becoming swamped with orders.

“There are shortages across the entire market,” claimed Amon, who will get about as main govt officer up coming month. “There are a couple of factors driving that – a V-shaped recovery across lots of sectors, the acceleration of the digital transformation, and specially for Qualcomm, we have found prospect with the growth of our addressable market place.”

5G and Apple had been a significant aspect of the quarter’s gains. Qualcomm has returned to providing baseband chips to iPhones previous yr right after the organizations ended a two-yr authorized dispute. Apple’s sturdy benefits last week highlight the traction for its units around the Xmas quarter.

That translated to Apple iphone ingredient suppliers these kinds of as Qualcomm. Its chip division’s income grew 81 per cent 12 months around yr to $6.53 billion.

But gains came not only from 5G smartphones but also from Web of Points, automotive and other adjacent industries that are adopting wireless connectivity — a important piece of Qualcomm’s expansion strategy outside of handsets.

“To show progress in Radio Frequency Entrance Conclude, progress in Net of Issues, advancement in automotive, those people are all pretty superior signals,” stated Jim McGregor, principal analysts with Tirias Exploration, a tech industry consulting organization.

With 5G, Qualcomm expanded its portfolio of processors to contain RF Front chips — the filters, switches, amplifiers and other semiconductors close to the smartphone antenna that aid manipulate wireless alerts.

RF Entrance Conclusion gross sales produced $1 billion in the quarter, up from $413 million all through the exact same quarter final 12 months.

“In just a number of years we have emerged as a person of the most significant RF materials in the smartphone ecosystem,” said Chief Executive Steve Mollenkopf, “with a long-term roadmap supporting 4G and 5G sub-6 bands as effectively as millimeter bands, making it possible for us to broaden our RF leadership.”

Qualcomm also posted $1 billion in revenue from non-smartphone, Internet of Issues gadgets, this kind of as Wi-Fi network equipment, virtual fact headsets and other connected gizmos.

On the lookout forward, Qualcomm expects 5G smartphones revenue will surge 450 million to 550 million this year, up from 225 million in 2020.

Qualcomm also could benefit from Huawei shift to spin off its smartphone division amid U.S. trade sanctions. Qualcomm didn’t supply numerous chips to Huawei, which has 16 per cent of general smartphone profits, in the past. But the spin-off of the Honor model could open the door for its rivals, which are Qualcomm buyers, to achieve industry share.

Searching forward, Qualcomm expects a seasonal slowdown in the present quarter. It forecast sales of $7.2 billion to $8 billion and adjusted earnings of $1.55 to $1.75 for each share.

Wall Street analysts forecast March quarter product sales of $7.07 billion and modified earnings of $1.56 per share.

Qualcomm launched success Wednesday after marketplaces closed. The stock ended trading at $162.30 but fell to $151.40 in after-several hours buying and selling.