Chip designer Qualcomm forecast first-quarter sales and profits above Wall Street targets on Wednesday (Nov 1) as a smartphone sales slump finally starts to ease and a renewed contract with Apple helps boost its outlook.
The San Diego, California-based company forecast current-quarter revenue of US$9.1 billion to US$9.9 billion, with a midpoint above analysts’ expectations of US$9.2 billion according to LSEG data. Qualcomm predicted current-quarter adjusted profits of US$2.25 to US$2.45 per share, beating expectations of US$2.23 according to LSEG.
For the just-ended fiscal fourth quarter, Qualcomm reported sales of US$8.67 billion and adjusted profits of US$2.02 per share, both above analysts’ estimates of US$8.51 billion and US$1.91 per share, according to LSEG data.
Chipmakers have been grappling with a smartphone market slump. Qualcomm is also facing new competition from Huawei Technologies, which has resumed producing its own smartphone chips after relying on the US company for the past several years.
Analysts also expect major Qualcomm customer Samsung Electronics to resume using some of its own in-house chips after using all Qualcomm chips in its most recent devices.
But Qualcomm is also making advances, saying in September it signed a fresh supply agreement with iPhone maker Apple that runs to 2026. Last week it disclosed plans for a renewed push into the laptop market with backing from Microsoft.
Fourth-quarter sales in Qualcomm’s chip unit were US$7.4 billion, beating analysts’ estimate of US$7.26 billion according to FactSet data. In Qualcomm’s intellectual property licensing business, sales of US$1.26 billion were in line with estimates of US$1.25 billion according to FactSet data.