Qualcomm has published a sales and profit prediction for the third quarter that falls short of Wall Street expectations, saying the smartphone sector would take longer to utilize extra chips before receiving new orders.
Following the announcement, Qualcomm shares fell nearly 7% in extended trading. In the estimate, the company cited macroeconomic headwinds and weaker global handset sales as causes. After high inflation reduced consumer spending on discretionary goods such as electronics, the smartphone market was among the first to suffer from declining demand.
As a result, suppliers reduced their new chip orders. Smartphone demand has remained poor despite promotions and price cuts, with worldwide smartphone sales down 13% in the first quarter, according to research company Canalys.
Qualcomm also faces stiffer competition, particularly for high-end smartphone chips, from Taiwan’s MediaTek. The company has forecast total revenue of $8.1 billion to $8.9 billion in the third quarter, with analysts polled by Refinitiv expecting revenue of $9.14 billion. It has estimated adjusted earnings per share of $1.70 to $1.90, compared to analysts’ expectations of $2.16.
The sources for this piece include an article in Reuters.