Stock Market News

Qualcomm forecasts sales below estimates as smartphone slump persists

2023.08.02 17:05


© Reuters. Qualcomm logo is seen in this illustration taken, May 8, 2023. REUTERS/Dado Ruvic/Illustration

By Chavi Mehta and Stephen Nellis

(Reuters) -Qualcomm forecast fourth-quarter sales below market expectations on Wednesday and said it would likely cut jobs as consumer spending on gadgets like smartphones remained stubbornly weak amid slowing global economic growth.

Demand for consumer electronics has also been hampered by China’s slower-than-expected economic recovery. Smartphone shipments in the world’s second largest economy were down 5% in the June quarter, Canalys data showed.

Qualcomm (NASDAQ:) said its forecast also takes into account the impact of macroeconomic headwinds, weaker global handset units and the fact that phone makers are using existing inventory rather than putting in fresh chip orders.

The company estimated fourth-quarter revenue of $8.1 billion to $8.9 billion, while analysts polled by Refinitiv expected $8.70 billion. Qualcomm forecast a fourth-quarter adjusted earnings range with a midpoint of $1.90, in line with analysts’ consensus estimate of $1.91 per share according to Refinitiv data.

Qualcomm warned of likely restructuring charges for job cuts.

“While we are in the process of developing our plans, we currently expect these actions to consist largely of workforce reductions, and in connection with any such actions we would expect to incur significant additional restructuring charge,” the company said in a securities filing.

Qualcomm shares fell about 4.5% in choppy extended trading.

At a conference in May, Qualcomm CEO Cristiano Amon said he had not seen signs of healthy consumption in China yet and the smartphone industry recovery was “a number of quarters out.”

Qualcomm rival MediaTek last week warned that phone manufacturers are “cautious” about buying chips due to tepid end-user demand.

Qualcomm said on Wednesday it expected the use of existing inventory by phone makers “will be a factor through the end of the calendar year.”

Qualcomm shares fell amid a broader sell-off in tech and chip stocks, with Philadelphia SE Semiconductor Index slipping 3.5%. Analysts are expecting Apple (NASDAQ:) to report its largest fiscal third-quarter revenue drop since 2016 later this week as iPhone sales slow in the U.S. and elsewhere.

But other chip firms are seeing different results. Shares of Qorvo (NASDAQ:) , which also supplies wireless chips to smartphone makers, rose 4% in extended trading after its forecast beat analysts’ expectations and CEO Bob Bruggeworth said it had won more business with its “largest customer,” which analysts believe is Apple .

Revenue at Qualcomm’s mainstay handset chip business fell 25% to $5.26 billion in the third quarter. Adjusted overall revenue of $8.44 billion missed estimates of $8.50 billion.

It forecast adjusted fourth-quarter earnings per share of $1.80 and $2, compared to estimates of $1.91.

The automotive sector was a bright spot as Qualcomm seeks to diversify beyond smartphone chips. Revenue from the sector grew 13% on the increasing use of computer chips in vehicles.

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 84,064.52 1.36%
ethereum
Ethereum (ETH) $ 1,936.82 2.39%
tether
Tether (USDT) $ 1.00 0.01%
xrp
XRP (XRP) $ 2.35 1.42%
bnb
BNB (BNB) $ 624.10 3.74%
solana
Solana (SOL) $ 128.88 1.21%
usd-coin
USDC (USDC) $ 1.00 0.00%
cardano
Cardano (ADA) $ 0.720457 2.72%
dogecoin
Dogecoin (DOGE) $ 0.173858 2.84%
tron
TRON (TRX) $ 0.220097 3.38%
staked-ether
Lido Staked Ether (STETH) $ 1,934.94 2.65%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 83,851.47 1.16%
pi-network
Pi Network (PI) $ 1.35 3.01%
leo-token
LEO Token (LEO) $ 9.78 2.49%
chainlink
Chainlink (LINK) $ 14.12 5.06%
the-open-network
Toncoin (TON) $ 3.47 1.25%
stellar
Stellar (XLM) $ 0.274319 3.46%
usds
USDS (USDS) $ 1.00 0.02%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,317.26 2.71%
hedera-hashgraph
Hedera (HBAR) $ 0.192379 4.53%
avalanche-2
Avalanche (AVAX) $ 18.83 2.46%
shiba-inu
Shiba Inu (SHIB) $ 0.000013 2.08%
sui
Sui (SUI) $ 2.34 4.52%
litecoin
Litecoin (LTC) $ 92.87 2.84%
mantra-dao
MANTRA (OM) $ 7.00 3.39%
polkadot
Polkadot (DOT) $ 4.42 2.37%
bitcoin-cash
Bitcoin Cash (BCH) $ 337.99 1.10%
ethena-usde
Ethena USDe (USDE) $ 0.999759 0.04%
weth
WETH (WETH) $ 1,934.58 2.20%
bitget-token
Bitget Token (BGB) $ 4.44 1.45%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 1.00 0.19%
hyperliquid
Hyperliquid (HYPE) $ 13.44 0.92%
whitebit
WhiteBIT Coin (WBT) $ 28.52 0.48%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,055.69 2.26%
monero
Monero (XMR) $ 210.89 0.35%
uniswap
Uniswap (UNI) $ 6.33 2.95%
susds
sUSDS (SUSDS) $ 1.04 0.10%
aptos
Aptos (APT) $ 5.37 4.08%
dai
Dai (DAI) $ 0.999845 0.02%
near
NEAR Protocol (NEAR) $ 2.64 5.09%
pepe
Pepe (PEPE) $ 0.000007 12.16%
okb
OKB (OKB) $ 50.82 3.89%
internet-computer
Internet Computer (ICP) $ 6.01 7.19%
mantle
Mantle (MNT) $ 0.817187 0.88%
ethereum-classic
Ethereum Classic (ETC) $ 18.12 3.65%
ondo-finance
Ondo (ONDO) $ 0.867123 5.84%
gatechain-token
Gate (GT) $ 21.97 3.09%
tokenize-xchange
Tokenize Xchange (TKX) $ 33.57 12.34%
aave
Aave (AAVE) $ 176.31 6.47%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 84,018.51 1.28%