Qcom Stock Falls as Qualcomm Cuts Q3 Revenue Outlook
Qcom stock faced a fresh test on Wednesday after Qualcomm projected third-quarter revenue of $9.2 billion to $10 billion, below the $10.23 billion analysts expected. The chipmaker still beat Wall Street on second-quarter revenue and profit, but the softer outlook puts more attention on handset demand, which drives most of its sales.
Qualcomm beats Q2 estimates
$2.65 in earnings per share on $10.59 billion of revenue marked Qualcomm’s second-quarter result, topping the $2.55 per share and $10.56 billion analysts had modeled. That left the company ahead on both the top and bottom lines, even as the comparison with last year’s $2.85 per share and $10.83 billion in revenue showed the business is running below its prior-year pace.
$9.07 billion from QCT, Qualcomm’s chip segment, came in slightly below the $9.13 billion analysts had expected, while licensing revenue of $1.38 billion beat the $1.32 billion estimate. The split shows the company still had support from licensing even as the larger chip unit delivered a modest miss.
Smartphone demand still weighs
4.1% fewer global smartphone shipments in the first quarter, to 289.7 million units, followed 10 quarters of growth that began in mid-2023. International Data Corporation called that drop a “mild precursor,” and Bernstein Research’s Stacy Rasgon said the broader smartphone space could face double-digit unit declines this year.
That matters for Qualcomm because its handset business makes up the vast majority of overall revenue. If smartphone shipments keep slipping, the company has less room to rely on its core chip business even after a quarter in which licensing helped offset some weakness.
June keynote for Cristiano Amon
June brings another public marker for the company: CEO Cristiano Amon is scheduled to deliver the keynote address at Computex in Taiwan. Qualcomm is also working to diversify into data center chip sales and automotive and robotics technologies, a push that now carries more weight after the weaker third-quarter guide.
The immediate reading for shareholders is simple: the second-quarter beat did not erase the forward revenue cut, and the next update will be whether demand in phones stabilizes enough to narrow the gap between Qualcomm’s current run rate and analyst expectations.
