Qualcomm stock drops 7% on weak earnings forecast as memory shortage weighs on smartphone sales — SkimNews
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- Qualcomm posted adjusted EPS of $2.17 versus $2.16 expected and $10.44 billion in adjusted revenue, topping Wall Street estimates even as adjusted company revenue fell 7% from a year earlier.
- Qualcomm guided to EPS between $2.15 and $2.35 on revenue of $10.4 billion to $11.2 billion; its earnings forecast came in lighter than expected against consensus of $2.27 EPS and $10.48 billion revenue, while shares slid 7% in extended trading.
- Qualcomm said rising memory costs are forcing handset makers to raise prices and hurting demand; despite its September price increase, handset-chip sales fell 26% to $5.14 billion, trailing StreetAccount’s $5.21 billion estimate. The company was starting to see sequential growth and said Android shipments in China had bottomed, while predicting a flat handset market in 2027.
- Cristiano Amon said Qualcomm’s AI data-center business has a supply constraint rather than a demand problem. It posted $650 million in quarterly revenue, mostly from customization and connectivity work; Qualcomm expects $5 billion in fiscal 2027, recently signed a customer for optical connectivity and engaged a global hyperscaler.
- Qualcomm reported automotive revenue up 89% from a year earlier to $1.99 billion, beating the $1.66 billion StreetAccount estimate.
- Qualcomm said IoT revenue rose 4% to $1.88 billion, slightly above estimates, and announced a deal to provide technology for SpaceX’s cellular buildout.
- Qualcomm renewed licensing agreements with Apple, Huawei and Transsion for 5G and other technologies; QTL revenue fell 7% to $1.3 billion, in line with estimates, while Cristiano Amon said the division would maintain its scale.
Why it matters: For Qualcomm and its investors, handset weakness is the immediate pressure point: handset-chip revenue fell 26% to $5.14 billion, and shares dropped 7% after the outlook disappointed. Yet automotive revenue jumped 89% to $1.99 billion and data-center revenue reached $650 million, showing that the chipmaker’s current earnings mix extends well beyond phones.
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