Qualcomm forecast fourth-quarter revenue below estimates on Wednesday, bracing for difficult economic conditions and a slowdown in smartphone demand that could hit its mainstay handset chips business.
The chip designer still surpassed expectations for adjusted
revenue in the third quarter.
Qualcomm's forecast comes at a time when leading chipmakers
including Micron Technology and Texas Instruments have warned of cooling
consumer electronics demand.
Smartphone sales have come under pressure as runaway
inflation, growing recession risks and repeated COVID-19 lockdowns in China
force consumers to rein in spending. Global smartphone shipments will fall 3.5
percent this year, according to data from IDC.
The Ukraine crisis and China lockdowns worsened supply-chain
snags as well and hurt demand, forcing many phone makers to cut orders for
chips
Qualcomm is looking to diversify to sectors such as
automotives, but its handset chip business still makes up more than half of
total sales.
The company forecast current-quarter revenue between $11
billion and $11.8 billion, compared with analysts' estimates of $11.87 billion,
according to Refinitiv data.
It expects adjusted earnings per share of between $3 and
$3.30, compared with estimates of $3.23.
Qualcomm said the mid-point of its fourth-quarter forecast
included an estimated impact of an about 20 cents reduction to earnings per
share due to macroeconomic headwinds and a lower global handset forecast.
Adjusted revenue for the quarter ended June 26, when
analysts expected strong demand from Apple, was $10.93 billion, compared with
estimates of $10.88 billion.
Separately, Qualcomm said it has also extended its patent
license agreement with Samsung Electronics through the end of 2030. It also
agreed to expand the use of Snapdragon platforms for future premium Samsung
Galaxy products, including Samsung Galaxy phones. © Reuters
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