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What is the story about?
Qualcomm Inc., which ranks among the biggest producers of smartphone processors, saw its stock fall over 9% in extended trading on Wall Street on Wednesday after its guidance for the ongoing quarter failed to enthuse the street.
Qualcomm expects current quarter sales to be between $10.2 billion to $11 billion with an Earnings Per Share (EPS) of $2.55. Analysts, on average, were working with a $11.2 billion sales figure and an EPS of $2.89.
While there is demand for high-end phones, some of its customers, mainly in China, are planning on making fewer handsets than expected as they are not able to procure enough memory chips and the prices are constantly on the rise.
There has been a consistent effort from Qualcomm to diversify its client base into cars, PCs and data centers, but these new avenues have not grown enough to offset the shortfall in its core business yet.
“While our near-term handsets outlook is impacted by industry-wide memory supply constraints, we are encouraged by end-consumer demand for premium and high-tier smartphones,” Qualcomm CEO Cristiano Amon said in the statement.
Qualcomm also missed expectations in the quarter gone by, reporting a $2.78 EPS versus analyst expectations of $3.41, while sales were marginally higher at $12.3 billion, compared to expectations of $12.2 billion.
Revenue from the Phone business stood at $7.82 billion, while analysts had projected a $7.86 figure. Internet-connected devices contributed to $1.69 billion in sales, while autos contributed $1.1 billion.
Qualcomm is planning to take on Nvidia in the AI data center components market and the first shipment of that is scheduled to arrive next year.
Qualcomm expects current quarter sales to be between $10.2 billion to $11 billion with an Earnings Per Share (EPS) of $2.55. Analysts, on average, were working with a $11.2 billion sales figure and an EPS of $2.89.
While there is demand for high-end phones, some of its customers, mainly in China, are planning on making fewer handsets than expected as they are not able to procure enough memory chips and the prices are constantly on the rise.
There has been a consistent effort from Qualcomm to diversify its client base into cars, PCs and data centers, but these new avenues have not grown enough to offset the shortfall in its core business yet.
“While our near-term handsets outlook is impacted by industry-wide memory supply constraints, we are encouraged by end-consumer demand for premium and high-tier smartphones,” Qualcomm CEO Cristiano Amon said in the statement.
Qualcomm also missed expectations in the quarter gone by, reporting a $2.78 EPS versus analyst expectations of $3.41, while sales were marginally higher at $12.3 billion, compared to expectations of $12.2 billion.
Revenue from the Phone business stood at $7.82 billion, while analysts had projected a $7.86 figure. Internet-connected devices contributed to $1.69 billion in sales, while autos contributed $1.1 billion.
Qualcomm is planning to take on Nvidia in the AI data center components market and the first shipment of that is scheduled to arrive next year.
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