Qualcomm revenue estimate misses approximation
US chipmaker Qualcomm Inc forecast third-quarter profit below analysts estimates as it expects to ship fewer chips, including those for smartphones, its biggest business.
The company’s shares dropped 3% to $50.50 in after market trading, having earlier oscillated between slight gains and losses.
Qualcomm, whose customers include Apple Inc and Samsung Electronics Co Ltd, said it expects chip shipments to fall 13-22% to 175-195 million in the current quarter.
The company said it expects 3G and 4G device shipments increase to 8% at the midpoint in this quarter, lower than its previous estimate of about 10% growth.
Besides slowing smartphone sales, Qualcomm is also being squeezed by competitors making chips that rival its own in price and performance, and the likes of Samsung and Apple increasingly making their own components for smartphones.
Qualcomm said it expects to earn between 90 cents and $1.00 per share in the third quarter. Analysts on average were expecting a profit of $1.02 per share, according to Thomson Reuters I/B/E/S.
The uncertainty in the smartphone business seemed to show in the company’s third-quarter revenue forecast of $5.2-$6.0 billion, which implies revenue could be between 11% lower and 3% higher than the year-ago quarter.
However, while Qualcomm’s chip business is the bigger contributor to revenue, the San Diego-based company’s business of licensing its chip technology is the bigger driver of profit. But here too the company has faced delays in closing licensing agreements in China, its biggest market.