Qualcomm has lower-than-expected results with weakness in smartphone market

THE Qualcomm forecast fiscal second-quarter revenue and earnings below market estimates. Wall Street, pressured by weak demand for smartphones and excess supply, a situation that should persist in the first half of this year.

Inflation and macroeconomic uncertainty hurt consumer electronics sales, and while the Qualcomm has been in part protected by its focus on premium smartphones, analysts say even that market has been hit.

“The handset industry continues to experience subdued demand and we now expect high levels of inventory in channels to persist through at least the first half of calendar 2023,” Cristiano Amon, Qualcomm’s chief executive, told investors on the evening. from thursday

To deal with these effects, the executive said that the company will cut more expenses and optimize operations.

THE applethe world’s largest listed company, said on Thursday that iPhone sales fell in the final quarter of last year for the first time since 2020.

Qualcomm forecast current-quarter revenue in the range of $8.7 billion to $9.5 billion, compared with analysts’ estimates of $9.55 billion, according to Refinitiv data.

Revenue for the first fiscal quarter fell 12% from a year earlier to $9.46 billion, missing Wall Street’s expectation of $9.60 billion.

“I don’t think we’ve hit rock bottom yet (for the smartphone market). We still have a difficult year ahead,” said IDC analyst Nabila Popal. “Real recovery is not likely until 2024.”

Fiscal first-quarter revenue from Qualcomm’s handset business, which accounts for the majority of the company’s total sales, fell 18% year-on-year to $5.75 billion, compared with 40% growth in the previous quarter.

The company expects adjusted earnings per share to be between $2.05 and $2.25, compared with analyst expectations of $2.26 per share.

For the first fiscal quarter, Qualcomm had adjusted earnings per share of $2.37, which compares with an analyst consensus of $2.34, according to Refinitiv data.