Qualcomm Reports Impressive Quarterly Results Alongside Weak Fourth-quarter Guidance

Shares of semiconductor company Qualcomm declined 5 percent in extended trading on Wednesday after the company its quarterly results alongside weak guidance for the fiscal first quarter. 

For its fiscal third quarter, the company reported adjusted earnings per share of $3.13. Analysts had expected earnings per share of $3.13, according to Refinitiv. Quarterly revenue came in at $11.39 billion, adjusted, beating analysts’ estimates of $11.37 billion, according to Refinitiv. 

According to a statement, overall revenue was up 22 percent year over year for the quarter which ended on the 25th of September. 

The company issued adjusted earnings of between $2.25 to $2.25 per share for its fiscal first quarter. It also said it expects revenue in the range of $9.2 billion and $10 billion for its fiscal first quarter. Analysts, on the other hand, expect earnings per share of $3.42 and revenue of $12.02 in the fiscal first quarter, according to Refinitiv. 

In its report, Qualcomm wrote that “Given the uncertainty caused by the macroeconomic environment, we are updating our guidance for calendar year 2022 3G/4G/5G handset volumes from a year-over-year mid-single-digit percentage decline, to a low double-digit percentage decline. The rapid deterioration in demand and easing of supply constraints across the semiconductor industry have resulted in elevated channel inventory.”

The company’s CDMA Technologies or QCT segment which houses smartphone chips, radio frequency front-end components, automotive chips, and internet of things (IoTs) devices, generated revenue of $9,9 billion in the fiscal fourth quarter. It was up 28 percent and surpassed analysts’ estimates of $9.87 billion, according to StreetAccount.

Within this segment, revenue from mobile handsets came to $6.57 billion, up 40% and slightly below the StreetAccount consensus of $6.59 billion.

The company’s other major unit known as Qualcomm Technology Licensing or QTL, which includes licensing fees related to 5G and other technologies the company makes, generated $1.44 billion in revenue. It was up 8 percent but below the $1.58 billion that analysts had expected, according to StreetAccount consensus.

The company said that it extended a patent-licensing agreement with Samsung through 2030, during the quarter. Arm, the company that provides the chip architectures that Qualcomm uses, also filed suit against Qualcomm over breach of license agreements and trademark infringement in the quarter.

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