Qualcomm (NASDAQ:QCOM) posted stronger-than-expected fourth-quarter results on Wednesday, but its shares slipped more than 2% in after-hours trading after the company warned it could lose part of its business with Samsung Electronics next year.
The warning overshadowed an otherwise solid performance, as the chip designer reported revenue and earnings ahead of Wall Street expectations, driven largely by strong demand for high-end smartphones. Qualcomm remains one of the world’s leading suppliers of modem chips, which enable mobile devices to connect to wireless networks.
Samsung has been a key contributor to recent sales growth, incorporating Qualcomm chips into its Galaxy S25 smartphones. However, CEO Cristiano Amon said the company is “preparing for the chip to make up a lower share” of Samsung’s next-generation handsets, according to Reuters.
For the quarter, Qualcomm reported earnings of $3.00 per share, surpassing analyst forecasts of $2.87, on revenue of $11.27 billion—also above the expected $10.75 billion.
Looking ahead, the company guided for fiscal first-quarter earnings between $3.30 and $3.50 per share on revenue of $11.8 billion to $12.6 billion, implying modest sequential growth from the fourth quarter at the midpoint of the range.
Full-year revenue climbed to $44.3 billion, while adjusted earnings reached $12.03 per share. Qualcomm’s chip division, QCT, delivered record annual revenue, with sales to non-Apple clients rising 18%, and combined automotive and Internet of Things revenue up 27%.
“The strong results are supported by handset strength in China, attributed to timing of the Chinese holiday and product launches, as well as solid performance in non-handsets and long-term opportunities in data centers. However, the intermediate term outlook is somewhat challenged, with some of the handset strength being cyclical and potentially short-lived,” analysts at BofA Securities said in a note.