Qualcomm Q3 adjusted EPS misses expectations, hurt by higher input costs

Overview

• U.S. semiconductor firm's fiscal Q3 revenue fell 4% yr/yr but beat analyst expectations

• Adjusted EPS for fiscal Q3 missed analyst expectations, declining 20% yr/yr

• Company completed Modular Inc acquisition to expand AI software capabilities

Outlook

• Qualcomm sees Q4 revenue between $9.7 bln and $10.5 bln

• Company expects Q4 non-GAAP diluted EPS of $2.05 to $2.25

• Qualcomm says higher input costs are being reflected in product pricing, benefiting gross margins over time

Result Drivers

• HANDSET WEAKNESS - Handset revenue fell 20% yr/yr, weighing on overall results

• AUTOMOTIVE AND IOT GROWTH - Automotive revenue rose 61% and IoT revenue grew 9% yr/yr, offsetting some handset declines

• HIGHER INPUT COSTS - Co said broad-based increases in input costs affected results, with actions underway to adjust pricing

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 15 "strong buy" or "buy", 25 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the semiconductors peer group is "buy."

• Wall Street's median 12-month price target for Qualcomm Inc is $205.00, about 25.9% above its July 28 closing price of $162.88

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

• July 29 - Qualcomm forecasts weak quarterly profit, expects Apple revenue drop to accelerate

• July 29 - Qualcomm wins BMW chip supply deal for future vehicle platforms

• July 28 - NXP Semiconductors forecasts upbeat quarter as AI push pays off

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)