wireless-chip leader Qualcomm (QCom) beat Wall Street’s own fiscal third-quarter targets late Wednesday, but came up short with its guidance for the current quarter. QCOM stock fell in extended trading.
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The San Diego-based company earned $2.96 per share in adjusted sales of $10.94 billion for the quarter ended June 26. Analysts polled by FactSet expected Qualcomm’s earnings on sales of $10.86 billion on sales of $2.89. On a year-over-year basis, Qualcomm’s earnings increased 54%, while sales grew 36%.
For the current quarter, Qualcomm predicted adjusted earnings of $3.15 per share on sales of $11.4 billion. This is based on the midpoint of its guidance. However, Wall Street had predicted Qualcomm earnings of $3.30 per share on sales of $12 billion in the fiscal fourth quarter.
Qualcomm said macroeconomic headwinds and a reduction in global handset sales forecasts weighed on its September-quarter outlook. The company said those factors would cut earnings per share by about 20 cents over the period.
QCOM stock falls after report
“Even with that impact, when you look at our guidance, we are growing EPS 24% on a year-on-year basis,” Chief Financial Officer Akash Palkiwala told Investors Business Daily. “And it’s faster than many of our peers who have very limited consumer exposure.”
In today’s trading hours on the stock market, QCOM stock fell 3.3% to 148.41. QCOM stock closed 2.3% higher at 153.42 during the regular session on Wednesday.
Palkiwala said consumers have become more cautious about spending amid rising inflation and economic turmoil. And this is affecting their willingness to buy new smartphones, he said.
Meanwhile, sales of Qualcomm’s automotive and Internet of Things chip remain strong, he said.
In other news, major customer Samsung Electronics has extended its patent license agreements for 3G, 4G, 5G and upcoming 6G mobile technology until the end of 2030. Samsung has also agreed to expand its use of Qualcomm Snapdragon products to future premium Samsung Galaxy products. Smartphones, PCs, tablets and extended reality headsets.
Qualcomm ranks no. 1 in the group
According to IBD Stock Checkup, QCOM stock ranks first out of 34 stocks in IBD’s fabless semiconductor industry group. It has an IBD composite rating of 98 out of 99.
The IBD’s overall rating is a mix of key fundamental and technical metrics to help investors assess a stock’s strength. The best growth stocks have a composite rating of 90 or better.
follow patrick setz on twitter @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.
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