Qualcomm falls on weak fourth quarter earnings guidance

SAN DIEGO - Qualcomm Inc (NASDAQ: QCOM) reported third quarter results that beat revenue expectations but missed on earnings, while issuing disappointing guidance for the current quarter that sent shares down 5%.

The chipmaker posted adjusted earnings per share of $2.21 for the third quarter ended June 28, missing the analyst consensus of $2.23 by $0.02. Revenue came in at $9.95 billion, beating the estimate of $9.67 billion but down 4% YoY from $10.37 billion in the prior year period. The company guided fourth quarter adjusted EPS of $2.05 to $2.25, with a midpoint of $2.15 that falls well below the analyst estimate of $2.35. Fourth quarter revenue guidance of $9.7 billion to $10.5 billion, with a midpoint of $10.1 billion, came in above the consensus of $9.95 billion.

Shares fell 5% following the announcement, driven by the weaker-than-expected earnings guidance for the fourth quarter.

"Despite a challenging memory and supply environment, our third quarter results reflect solid execution of our growth strategy, with quarterly revenues at the high end of guidance," said Cristiano Amon, President and CEO of Qualcomm Inc.

The company’s QCT segment, which includes chips for handsets, automotive and IoT devices, generated revenue of $8.5 billion, down 5% YoY. Within QCT, handset revenue declined 20% YoY to $5.09 billion, while automotive revenue surged 61% to $1.59 billion, marking 23 consecutive quarters of double-digit YoY growth. IoT revenue increased 9% to $1.83 billion. Combined automotive and IoT revenues grew 28% YoY. The QTL licensing segment posted revenue of $1.28 billion, down 3% YoY.

Qualcomm cited a broad-based increase in semiconductor industry input costs across wafer fabrication, assembly, test, advanced packaging, memory and other materials. The company said it is taking actions to reflect higher input costs in product pricing.

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