Qualcomm (QCOM) Q2 2023 Earnings Report


Cristiano Amon, president and CEO of Qualcomm, speaks during the Milken Institute Global Conference on May 2, 2022 in Beverly Hills, California.

Patrick T. Fallon | AFP | Getty Images

Qualcomm reported second quarter results on Wednesday that were in line with analysts’ expectations but saw sales of handset chips, a core business of the company, drop 17% on an annual basis.

Qualcomm shares fell more than 4% in extended trading.

Here’s how the chipmaker fared against Refinitiv’s consensus estimates:

  • EPS: $2.15 per share, adjusted, from expectations of $2.15 per share
  • Income: $9.27 billion, against expectations of $9.1 billion

In the quarter ending March, Qualcomm said net income fell 42% to $1.70 billion, or $1.52 per share, from $2.93 billion, or $2.57 per share, a year ago.

Qualcomm said it expects about $8.5 billion in sales in the current quarter, below Wall Street expectations of $9.14 billion. Analysts had expected a current-quarter earnings forecast of $2.16 per share, but Qualcomm said it expected it to be around $1.80.

In a statement, Qualcomm CEO Cristiano Amon blamed the results on a difficult environment, and the company said it had not seen evidence that smartphone sales were picking up in China. The smartphone market faces a difficult 2023, with shipments for the global market down more than 14% in the first quarter, according to IDC.

“The changing macroeconomic backdrop has led to a further deterioration in demand, particularly for handsets, of a magnitude greater than we previously anticipated,” Qualcomm CEO Cristiano Amon said on a call. to analysts.

Qualcomm’s chip segment, called QCT, sells smartphone processors, automotive chips and other parts for advanced electronics. It fell 17% to $7.94 billion in revenue during the quarter.

Most of QCT’s sales come from handset chips, which are the processors at the heart of most Android phones. Qualcomm reported handset sales of $6.11 billion, down 17% from a year ago.

Qualcomm said it expected a larger-than-normal decline in QTL revenue in the third quarter, saying it was related to “the timing of purchases by a modem-only handset customer.” Qualcomm rarely discusses its business with Apple and hasn’t named the company, but Apple buys modems from the company for its iPhones and other devices.

“Given the weaker handset forecast, until demand normalizes and visibility improves, we expect customers to remain cautious with purchases,” said Qualcomm chief financial officer Akash Palkhiwala. , when calling.

Qualcomm’s automotive business, which includes chips and software for cars, is still small, though it grew 20% in the quarter to $447 million in revenue. It is reported as part of QTL.

Qualcomm’s licensing segment, QTL, which sells access to technologies needed for cellular service, saw an 18% annual decline in revenue to $1.29 billion.

Qualcomm said it completed $900 million in share buybacks and paid $800 million in dividends during the quarter.

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