Cristiano Amon, President and CEO of Qualcomm, speaks during the Milken Institute Global Conference on May 2, 2022, in Beverly Hills, California.
Patrick T Fallon | AFP | Getty Images
Qualcomm mentioned second quarter earnings On Wednesday that was in line with analyst expectations but saw sales of phone chips, a core business for the company, fall 17% year over year.
Qualcomm shares fell more than 2% in extended trading.
Here’s how the chipmaker performed against Refinitiv’s consensus ratings:
- EPS: $2.15 a share, adjusted, versus an expectation of $2.15 a share
- he won: $9.27 billion, compared to expectations of $9.1 billion
In the quarter ending in March, Qualcomm said net income fell 42% to $1.70 billion, or $1.52 per share, from $2.93 billion, or $2.57 per share, a year earlier.
Qualcomm said it expects sales of $8.5 billion in the current quarter, which fell short of Wall Street’s forecast of $9.14 billion. Analysts had expected earnings guidance for the current quarter at $2.16 per share, but Qualcomm said it expects it to be around $1.80.
Qualcomm CEO Cristiano Amon, in a statement, blamed the results on a challenging environment, and the company said it had seen no evidence of a recovery in smartphone sales in China. The smartphone market is looking forward to a difficult 2023, as shipments to the global market fell by more than 14% in the first quarter, According to IDC.
“The evolving macroeconomic backdrop has led to a further deterioration in demand, particularly in mobile phones, of a greater magnitude than we previously anticipated,” Qualcomm CEO Cristiano Amon said on a call with analysts.
Qualcomm’s chip segment, called QCT, sells smartphone processors, automotive chips and other parts to advanced electronics. Its revenue fell 17% to $7.94 billion during the quarter.
The bulk of QCT’s sales come from phone chips, which are the processors at the heart of most Android phones. Qualcomm reported $6.11 billion in phone sales, down 17% from a year ago.
Qualcomm said it expects a larger than usual decline in the third quarter for QTL revenue, saying that was related to the “timing of the purchase by the modem-only phone customer.” Qualcomm rarely discusses its business with Apple, and did not name the company, but Apple buys modems from the company for iPhones and other devices.
Qualcomm’s automotive business, which includes chips and software for cars, remains small, although it showed 20% growth for the quarter to $447 million in revenue. Reported as part of a QTL.
Qualcomm’s licensing segment, QTL, which sells access to technologies needed for cellular service, reported an 18% annual decline in revenue to $1.29 billion.
Qualcomm said it generated $900 million in share buybacks and paid $800 million in dividends during the quarter.
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