Qualcomm reported adjusted earnings per share of $2.21 and revenue of $9.95 billion, both of which were in line with analyst estimates. However, the company anticipates adjusted earnings per share for the current quarter to be between $2.05 and $2.25, falling short of the $2.36 expected by analysts.
CEO Cristiano Amon highlighted the impact of a broad-based increase in input costs across the semiconductor sector, particularly affecting memory and fabrication.
Despite a 20% year-over-year decline in handset chip sales, which totaled $5.1 billion, Qualcomm is diversifying its business focus towards automotive and AI markets, aiming for non-smartphone sales to constitute 60% of revenues by next year. The automotive segment showed promise with $1.59 billion in sales, and Qualcomm is targeting $10 billion in automotive revenue by 2029.
The company also completed the acquisition of Modular, enhancing its capabilities in AI software. Overall, while Qualcomm's revenues remain healthy, the company is navigating significant cost pressures and shifting consumer preferences in the smartphone market, which may affect its short-term profitability