Qualcomm's Outlook for This Fiscal Quarter Is Lukewarm, Shares Drop Nearly 9% After Hours, Signs Indicate Unstable Demand for Mobile Chips
Smartphone chip manufacturer Qualcomm has provided a lukewarm revenue outlook for the current fiscal quarter, raising concerns that a shortage of memory chips and resulting price increases could dampen smartphone demand. Qualcomm’s shares plunged in after-hours trading.
Qualcomm reported after the close on Wednesday that it expects second-quarter revenue to reach between $10.2 billion and $11 billion. Excluding certain items, earnings per share are expected to be $2.55. According to data compiled by Bloomberg, analysts on average had projected revenue of $11.2 billion and earnings per share of $2.89.
Qualcomm said that while demand for high-end smartphones remains, tight memory chip supply and soaring prices will cause some customers—particularly in China—to produce fewer phones than expected. CEO Cristiano Amon is driving the company’s transition to diversify into auto, PC, and data center chip sales, but these new businesses are still not large enough to offset the slowdown in the smartphone chip market.
In a statement, Amon said: “Although our short-term outlook for the mobile chip business is being impacted by industry-wide memory chip supply constraints, we remain encouraged by demand for premium smartphones.”
Qualcomm shares closed at $148.89 in New York on Wednesday, falling about 9% in after-hours trading. The stock has fallen 13% so far this year.
For the first fiscal quarter ended December 28, Qualcomm’s earnings per share, excluding certain items, were $2.78; quarterly revenue grew 5% to about $12.3 billion. Analysts had expected earnings per share of $3.41 and revenue of $12.2 billion.
Editor: Li Tong
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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