Qualcomm stock drops 9% as phone chip sales dive
Amon Cristiano, CEO of Qualcomm, speaking on Squawk Box at the WEF in Davos, Switzerland on Jan. 17th, 2023.
Shares of Qualcomm fell about 9% in pre-market trading Thursday, a day after the chipmaker reported weaker-than-expected quarterly revenue and guidance as it continues to see declining sales for smartphone chips.
Qualcomm's third-quarter earnings beat on the top 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 revenue, at $8.44 billion adjusted versus an $8.5 billion analyst consensus estimate, and lower than anticipated guidance for the upcoming quarter. Qualcomm expects earnings of between $1.8 and $2 per share on sales ranging from $8.1 billion to $8.9 billion.
Analysts had been hoping for $1.91 per share earnings and $8.7 billion in revenue, according to a Refinitiv survey of analysts. Net income also dropped 52% compared to the year-ago quarter, from $3.73 billion to $1.8 billion.
Qualcomm is more exposed than most because of its heavy reliance on high-end and low-end Android phone sales. Handset chip sales declined 25% year over year, to $5.26 billion.
Deutsche Bank analyst Ross Seymore minced no words in a Thursday note, downgrading Qualcomm to a hold and cutting his price target from $130 to $120. "We believe confidence in the co's growth potential will remain challenged," he wrote in a letter to clients.
CNBC's Kif Leswing and Michael Bloom contributed to this report.
Source: CNBC
