By Stephen Nellis and Max A. Cherney
(Reuters) -Qualcomm on Wednesday forecast fiscal second-quarter revenue barely above Wall Road estimates and gross sales in step with market expectations however traders had been involved in regards to the chip maker’s Android gross sales in China.
The gross sales outlook displays curiosity in new Qualcomm chips with options designed to assist run chatbots, picture turbines and different artificial-intelligence options instantly on a tool as a substitute of in cloud computing information facilities.
Shares seesawed in after-hours buying and selling and had been final down 0.8%.
Qualcomm executives advised analysts on a convention name that after a flurry of creating new chips for Android telephones launched on the finish of final yr, they count on chip gross sales into the corporate’s most essential market to be flat within the present fiscal second quarter. Analysts stated this indicated Qualcomm is shedding market share to rivals in China.
Qualcomm predicted gross sales and adjusted revenue with a midpoint of $9.30 billion and $2.30 per share for the present fiscal second quarter ending in March. The outlook compares with analyst estimates of $9.30 billion and $2.25 per share, in line with information from LSEG.
Along with the outcomes, the corporate stated on Wednesday it has reached a chip provide take care of Samsung to produce chips globally for its top-end Galaxy S24 mannequin. However that deal doesn’t cowl all of Samsung’s latest fashions, a few of which can use Samsung’s personal chips, a reversal from the earlier era of telephone the place the South Korean electronics large used Qualcomm chips completely.
Certainly, Qualcomm is going through challenges on a number of fronts, with Huawei utilizing Qualcomm just for 4G telephones because of U.S. export restrictions and Taiwan’s MediaTek difficult Qualcomm’s stronghold in mid- and premium-tier Android telephones.
“A easy comparability in opposition to MediaTek outcomes and outlook clearly confirmed our concern that Qualcomm is shedding market share within the Chinese language Android market,” stated Kinngai Chan, an analyst at Summit Insights.
In its patent enterprise, Qualcomm stated Apple prolonged a licensing deal by way of March 2027. Qualcomm stated in September it had signed a deal to produce Apple with chips by way of 2026 however famous that a part of a patent deal made with the iPhone maker within the wake of a serious antitrust battle was set to run out subsequent yr.
For Qualcomm, “5% income progress and 24% earnings progress could be very constructive in a skeptical earnings season surroundings,” stated Thomas J. Hayes of Nice Hill Capital.
San Diego, California-based Qualcomm can also be increasing into different markets corresponding to private computer systems, with companions corresponding to Dell Applied sciences and Lenovo Group anticipated to debut laptops with chips that Qualcomm claims are quicker than Apple’s in-house processors.
For the fiscal first quarter ended on Dec. 24, Qualcomm reported gross sales and adjusted revenue of $9.94 billion and $2.75 per share, above estimates of $9.52 billion and $2.37 per share, in line with LSEG information.
In Qualcomm’s chip phase, the corporate forecast fiscal second-quarter gross sales with a midpoint of $7.9 billion, above analyst estimates of $7.86 billion. Qualcomm predicted second- quarter gross sales with a midpoint of $1.3 billion in its patent-licensing enterprise, in step with estimates of $1.3 billion.
For the just-ended fiscal first quarter, Qualcomm stated chip and licensing revenues had been $8.42 billion and $1.46 billion, respectively, above/beneath analyst estimates of $7.99 billion and $1.41 billion, in line with LSEG information.
Inside its chip enterprise, Qualcomm stated that cell handsets generated $6.69 billion in gross sales within the first quarter, above estimates of $6.37 billion, in line with information from Seen Alpha. Automotive and Web-of-Issues chip revenues within the first quarter had been $598 million and $1.14 billion, respectively, in contrast with analyst estimates of $518.3 million and $1.22 billion.
(Reporting by Stephen Nellis and Max A. Cherney in San FranciscoAdditional reporting by Arsheeya Singh Bajwa in Bengaluru Enhancing by Sayantani Ghosh and Matthew Lewis)
