Shares of Qualcomm (NASDAQ:QCOM) declined slightly in premarket trading on Thursday, as the company’s fourth-quarter outlook matched forecasts but failed to fully reassure investors about demand trends.
The San Diego-based semiconductor firm, known for its modem chips that enable smartphone wireless connectivity, reported adjusted earnings of $2.77 per share, surpassing the consensus estimate of $2.71. Revenue climbed 10% year-over-year to $10.37 billion, modestly beating Wall Street’s $10.33 billion forecast.
Qualcomm’s main chip division, Qualcomm CDMA Technologies (QCT), generated $8.99 billion in sales, an 11% increase from the previous year. Handset-related revenue within QCT rose 7% to $6.33 billion, while automotive sales reached a new high of $984 million, up 21% year-over-year, and IoT revenue surged 24% to $1.68 billion.
“Another quarter of strong growth in QCT Automotive and IoT revenues further validates our diversification strategy and confidence in achieving our long-term revenue targets,” stated Cristiano Amon, Qualcomm’s President and CEO.
He added, “Our leadership in AI processing, high-performance and low-power computing and advanced connectivity positions us to become the industry platform of choice as AI gains scale at the edge.”
The update highlights Qualcomm’s ongoing transition toward more varied markets amid challenges in its traditional handset business. Analysts at Vital Knowledge noted that sales in the handset segment missed Wall Street’s expectation of $6.478 billion.
Together, automotive and IoT now make up nearly 30% of QCT’s total sales, with the automotive segment benefiting from increasing adoption of Snapdragon-based digital cockpits and advanced driver-assistance systems (ADAS).
For the last quarter of its fiscal year, Qualcomm forecasted revenue between $10.3 billion and $11.1 billion, aligning with analysts’ average estimate of $10.6 billion. Earnings per share guidance ranged from $2.75 to $2.95, compared to the consensus forecast of $2.82.
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