Qualcomm reported adjusted earnings per share of $2.17, slightly above the expected $2.16, and revenue of $10.32 billion, surpassing the $10.11 billion forecast.
However, the company's outlook for the current quarter is less optimistic, projecting earnings per share between $2.15 and $2.35 on revenue of $10.4 billion to $11.2 billion, which falls short of analyst expectations of $2.27 EPS and $10.48 billion in revenue.
The smartphone chip market is under pressure, with Qualcomm's handset chip sales dropping 26% to $5.14 billion, below the anticipated $5.21 billion. Despite raising prices in September, overall revenue fell 8% year-over-year.
CEO Cristiano Amon noted that while Qualcomm is seeing sequential growth in handset sales and believes the market has bottomed, it anticipates flat growth in the sector through 2027. The company is also diversifying its portfolio, aiming to capture a share of the AI data center market, with a goal of $5 billion in revenue by fiscal 2027.
In contrast, Qualcomm's automotive chip revenue surged 89% to $1.99 billion, exceeding expectations, and IoT revenue rose 4% to $1.88 billion. The QTL division, which licenses technology, saw a 7% decline in revenue to $1.3 billion, aligning with estimates.
Overall, Qualcomm's performance reflects the ongoing challenges in the semiconductor industry, particularly in the smartphone segment, while also indicating potential growth areas in automotive and data center markets