Qualcomm stock drops 10% as phone chip sales dive

Shares of Qualcomm fell about 10% in Thursday morning buying and selling, a day after the chipmaker reported weaker-than-expected quarterly income and steering because it continues to see declining gross sales for smartphone chips.

Qualcomm’s third-quarter earnings beat on the highest line, reporting adjusted earnings per share of $1.87 versus a Refinitiv consensus estimate of $1.81 per share.

But that victory was overshadowed by weaker-than-expected income, at $8.44 billion adjusted versus an $8.5 billion analyst consensus estimate, and decrease than anticipated steering for the upcoming quarter. Qualcomm expects earnings of between $1.80 and $2 per share on gross sales starting from $8.1 billion to $8.9 billion.

Analysts had been hoping for $1.91 per share earnings and $8.7 billion in income, in accordance with a Refinitiv survey of analysts. Net revenue additionally dropped 52% in contrast with the year-ago quarter, from $3.73 billion to $1.8 billion.

Qualcomm is extra uncovered than most due to its heavy reliance on high-end and low-end Android telephone gross sales. Handset chip gross sales declined 25% 12 months over 12 months, to $5.26 billion.

Deutsche Bank analyst Ross Seymore minced no phrases in a Thursday be aware, downgrading Qualcomm to a maintain and reducing his value goal from $130 to $120. “We believe confidence in the co’s growth potential will remain challenged,” he wrote in a letter to shoppers.

— CNBC’s Kif Leswing and Michael Bloom contributed to this report.