Qualcomm president and CEO Cristiano Amon speaks about Qualcomm’s expertise for automakers at a information convention throughout CES 2022 in Las Vegas, Nevada, January 4, 2022.
Steve Marcus | Reuters
Qualcomm reported third-quarter earnings on Wednesday that beat Wall Avenue expectations, however income and steering for the fourth quarter got here up quick.
Qualcomm inventory fell 4% in prolonged buying and selling.
This is how the chipmaker did for the quarter ending on June 25:
- Earnings: $1.87 per share, adjusted, versus $1.81 per share anticipated by Refinitiv consensus estimates.
- Income: $8.44 billion, versus $8.5 billion anticipated by Refinitiv consensus estimates.
Qualcomm stated it anticipated earnings of between $1.80 and $2.00 per share on between $8.1 billion and $8.9 billion in gross sales within the fourth quarter, wanting Refinitiv consensus expectations of $1.91 in earnings on $8.7 billion in income.
Web 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 on the identical time final yr.
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 lots of lower-end telephones.
Shipments of recent units are anticipated by analysts to say no in 2023 and Qualcomm repeated that it expects handset items to say no a “high-single digit proportion” this yr, partially because of a gradual China restoration. Nevertheless, Qualcomm stated it sees development in handsets but once more 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% on an annual foundation.
Handset chip gross sales are the largest a part of QCT, and people declined 25% year-over-year to $5.26 billion.
The corporate’s automotive enterprise, which sells chips and software program for autonomous automobiles, was a shiny spot, rising 13% to $434 million in income in the course of the quarter.
Nevertheless, the corporate’s web of issues enterprise, which makes lower-cost chips for low-power units and industrial makes use of, declined 24% to $1.48 billion in gross sales. Qualcomm’s Web of Issues enterprise additionally consists of chip gross sales to Meta for its Quest VR headsets.
Qualcomm’s worthwhile licensing enterprise, QTL, declined 19% to $1.23 billion in income.
Qualcomm CEO Cristiano Amon highlighted the chipmaker’s AI technique in an announcement as semiconductor corporations search to capitalize on the business deal with the chips wanted to run software program like OpenAI’s ChatGPT. He stated that Qualcomm’s skill to run AI fashions on telephones, as a substitute of on cloud servers, provides the corporate an opportunity for an “inflection level” that would drive development sooner or later.
Qualcomm stated it had diminished prices by 5% to this point this yr relative to its spending in 2022. In June, it reduce 415 jobs at its San Diego headquarters, the San Diego Union-Tribune reported. Qualcomm stated that it’s going to implement extra price financial savings program within the first half of subsequent yr.
Qualcomm stated it paid $893 million in dividends and repurchased $400 million in inventory in the course of the quarter.
