Qualcomm president and CEO Cristiano Amon speaks about Qualcomm’s know-how for automakers at a news convention throughout CES 2022 in Las Vegas, Nevada, January 4, 2022.
Steve Marcus | Reuters
Qualcomm reported third-quarter earnings on Wednesday that beat Wall Street expectations, however income and steering for the fourth quarter got here up quick.
Qualcomm inventory fell over 6% in prolonged buying and selling.
Here’s how the chipmaker did for the quarter ended on June 25:
- Earnings: $1.87 per share, adjusted, versus $1.81 per share anticipated by Refinitiv consensus estimates.
- Revenue: $8.44 billion, adjusted, versus $8.5 billion anticipated by Refinitiv consensus estimates.
Qualcomm stated it anticipated earnings of between $1.80 and $2 per share on between $8.1 billion and $8.9 billion in gross sales within the fourth quarter, in need of Refinitiv consensus expectations of $1.91 in earnings on $8.7 billion in income.
Net revenue in the course of the quarter fell to $1.8 billion, or $1.60 per share, a staggering 52% drop from the $3.73 billion, or $3.29 per share, reported a 12 months earlier.
Qualcomm is uncovered to the slumping smartphone business as a result of it makes the processors on the coronary heart of most high-end Android units and plenty of lower-end telephones.
Shipments of recent units are anticipated by analysts to say no in 2023 and Qualcomm repeated that it expects handset models to say no a “high-single digit percentage” this 12 months, partially because of a gradual China restoration. However, the chipmaker stated it sees progress in handsets beginning within the vacation season.
QCT, Qualcomm’s largest division that sells processors for smartphones, automobiles, and different sensible units, reported $7.17 billion in gross sales, down 24% from a 12 months earlier.
Handset chip gross sales are the largest a part of QCT, and people declined 25% 12 months over 12 months to $5.26 billion.
“Handset remains difficult to predict the timing of a sustained recovery and customers remain cautious with purchases,” Qualcomm finance chief Akash Palkhiwala stated on an earnings name with analysts.
The firm’s automotive business, which sells chips and software program for autonomous automobiles, was a brilliant spot, rising 13% to $434 million in income in the course of the quarter.
However, the web of issues business, which makes lower-cost chips for low-power units and industrial makes use of, fell 24% to $1.48 billion in gross sales. The section additionally consists of chip gross sales to Meta for its Quest VR headsets.
Qualcomm’s worthwhile licensing business, QTL, declined 19% to $1.23 billion in income.
Qualcomm CEO Cristiano Amon highlighted the chipmaker’s synthetic intelligence technique in a press release as semiconductor companies search to capitalize on the business give attention to the chips wanted to run software program like OpenAI’s ChatGPT. He stated Qualcomm’s potential to run AI fashions on telephones, as a substitute of on cloud servers, offers the corporate an opportunity for an “inflection point” that might drive progress sooner or later.
“In summary, we are uniquely positioned to help shape and capitalize on the upcoming on-device Gen AI opportunity,” Amon stated.
Qualcomm stated it had diminished prices by 5% thus far this 12 months relative to its spending in 2022. In June, it lower 415 jobs at its San Diego headquarters, the San Diego Union-Tribune reported. The firm stated that it’s going to implement extra cost-saving applications within the first half of subsequent 12 months.
Qualcomm stated it paid $893 million in dividends and repurchased $400 million in inventory in the course of the quarter.
Correction: An earlier model did not point out that Qualcomm’s quarterly income of $8.44 billion was adjusted.
Source: www.cnbc.com