Qualcomm released fiscal third-quarter financial results that matched analyst expectations, though the chipmaker’s forward-looking guidance disappointed the market. The company projected adjusted earnings per share between $2.05 and $2.25 for the current quarter on revenue of $9.7 billion to $10.5 billion, falling short of analyst estimates of $2.36 in adjusted earnings per share on $10.02 billion in sales. In response to elevated input costs across manufacturing processes, Chief Executive Officer Cristiano Amon announced that Qualcomm would implement across-the-board price increases on its chip portfolio effective September 1.
The semiconductor industry faces broad-based cost pressures stemming from wafer fabrication, assembly, testing, advanced packaging, and memory expenses, according to company statements. Despite these challenges, management noted that revenue streams remained stable. Amon attributed some market headwinds to changing consumer preferences, particularly in the smartphone segment where buyers have gravitated toward lower-priced devices and previous-generation models due to elevated memory costs. The handset business, traditionally Qualcomm’s largest revenue source, generated $5.1 billion in sales, representing a 20 percent annual decline that the company characterized as reflecting stabilization in the China market.
Qualcomm demonstrated growth momentum in several diversification initiatives. Automotive chip sales reached $1.59 billion, with the company having previously outlined a target of $10 billion in automotive revenue by 2029. The company also completed its acquisition of Modular, a software developer focused on artificial intelligence programming technology, and stated plans to introduce its AI software platform at an industry conference in August. Internet of things revenue, which encompasses low-power industrial applications and smart glasses chips, rose 9 percent annually to $1.83 billion.
The company’s intellectual property licensing division generated $1.28 billion, exceeding analyst expectations of $1.26 billion. Net income declined to $2 billion from $2.66 billion in the comparable prior-year quarter, reflecting a 25 percent decrease. Management indicated that the cost pressures driving the price increase strategy represented temporary conditions that would be addressed through the pricing adjustments and supply chain optimization efforts.
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