Qualcomm released quarterly financial results on Wednesday that exceeded Wall Street consensus estimates on earnings but fell short on forward guidance, prompting a 7% stock decline in extended trading. The company reported earnings per share and revenue figures that surpassed analyst expectations for the recently completed quarter, yet its outlook for the current quarter disappointed investors. The chipmaker guided for earnings per share between $2.15 and $2.35 with revenue projected between $10.4 billion and $11.2 billion, below analyst expectations of $2.27 per share and $10.48 billion in revenue.
The semiconductor company attributed weakened performance to challenging conditions in its primary smartphone market, where rising memory costs have prompted handset manufacturers to increase prices and consumers have reduced purchases. Adjusted company revenue fell 7% compared to the prior year. Handset chip sales specifically declined 26% to $5.14 billion during the quarter, trailing analyst estimates. Chief Executive Cristiano Amon noted that Android shipments in China have stabilized and the company anticipates sequential growth in handset chips, though the overall smartphone market is expected to remain flat in 2027.
Qualcomm is pursuing growth in other semiconductor categories beyond smartphones. The data center segment generated $650 million in revenue during the quarter, focused on customization and connectivity services. Management projected the data center division will reach $5 billion in revenue in fiscal 2027, supported by recent customer wins including engagement with a global hyperscaler and a new optical connectivity customer. Amon indicated that supply constraints rather than demand weakness were limiting growth in this segment.
Other divisions showed mixed results. The automotive chip business surged 89% annually to $1.99 billion, exceeding analyst projections. The internet of things division, which encompasses low-power processors, smart glasses systems-on-chips, laptop chips, and cellular infrastructure initiatives, posted a 4% year-over-year increase to $1.88 billion. The company also announced a technology partnership with SpaceX for cellular infrastructure. Licensing revenue in the QTL division declined 7% to $1.3 billion, reflecting flat expectations, though the company reaffirmed licensing agreements with Apple, Huawei, and Transsion.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI