Qualcomm sales and forecast come up light as smartphone chip sales fall 25%

Qualcomm reported third-quarter net connected Wednesday that bushed Wall Street expectations, but gross and guidance for the 4th fourth came up short.

Qualcomm banal fell 4% successful extended trading.

Here's however the chipmaker did for the 4th ending connected June 25:

Earnings: $1.87 per share, adjusted, versus $1.81 per stock expected by Refinitiv statement estimates.Revenue: $8.44 billion, versus $8.5 cardinal expected by Refinitiv statement estimates.

Qualcomm said it expected net of betwixt $1.80 and $2.00 per stock connected betwixt $8.1 cardinal and $8.9 cardinal successful income successful the 4th quarter, abbreviated of Refinitiv statement expectations of $1.91 successful net connected $8.7 cardinal successful revenue.

Net income during the 4th fell to $1.8 billion, oregon $1.60 per share, a staggering 52% driblet from the $3.73 cardinal oregon $3.29 per stock reported astatine the aforesaid clip past year.

Qualcomm is exposed to the slumping smartphone manufacture due to the fact that it makes the processors astatine the bosom of astir high-end Android devices and galore lower-end phones.

Shipments of caller devices are expected by analysts to diminution successful 2023 and Qualcomm repeated that it expects handset units to diminution a "high-single digit percentage" this year, partially owed to a dilatory China recovery. However, Qualcomm said it sees maturation successful handsets yet again starting successful the vacation season.

QCT, Qualcomm's biggest part that sells processors for smartphones, cars, and different astute devices, reported $7.17 cardinal successful sales, down 24% connected an yearly basis.

Handset spot income are the biggest portion of QCT, and those declined 25% year-over-year to $5.26 billion.

The company's automotive business, which sells chips and bundle for autonomous cars, was a agleam spot, rising 13% to $434 cardinal successful gross during the quarter.

However, the company's net of things business, which makes lower-cost chips for low-power devices and concern uses, declined 24% to $1.48 cardinal successful sales. Qualcomm's Internet of Things concern besides includes spot income to Meta for its Quest VR headsets.

Qualcomm's profitable licensing business, QTL, declined 19% to $1.23 cardinal successful revenue.

Qualcomm CEO Cristiano Amon highlighted the chipmaker's AI strategy successful a connection arsenic semiconductor firms question to capitalize connected the manufacture absorption connected the chips needed to tally bundle similar OpenAI's ChatGPT. He said that Qualcomm's quality to tally AI models connected phones, alternatively of connected unreality servers, gives the institution a accidental for an "inflection point" that could thrust maturation successful the future.

Qualcomm said it had reduced costs by 5% truthful acold this twelvemonth comparative to its spending successful 2022. In June, it chopped 415 jobs astatine its San Diego headquarters, the San Diego Union-Tribune reported. Qualcomm said that it volition instrumentality much outgo savings programme successful the archetypal fractional of adjacent year.

Qualcomm said it paid $893 cardinal successful dividends and repurchased $400 cardinal successful banal during the quarter.