Qualcomm shares dip premarket as guidance disappoints investors

Investing.com -- Qualcomm (NASDAQ:QCOM) shares moved lower in premarket trading on Thursday, as in-line fourth-quarter guidance raised concerns over end-market demand.

San Diego-based Qualcomm, which offers modem chips that help smartphones connect to wireless networks, posted adjusted earnings of $2.77 per share, ahead of the $2.71 consensus forecast. Revenue rose 10% year-over-year to $10.37 billion, slightly exceeding Wall Street’s expectation of $10.33 billion.

The company’s core chip business, Qualcomm CDMA Technologies (QCT), delivered $8.99 billion in sales, up 11% from a year earlier. Within QCT, handset-related sales grew 7% to $6.33 billion, while automotive revenue hit a record $984 million, up 21% year-over-year, and IoT revenue rose 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,” said Cristiano Amon, President and CEO of Qualcomm Incorporated.

Amon 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 report underscores Qualcomm’s shift toward more diversified markets amid headwinds in its legacy handset segment. In a note, analysts at Vital Knowledge flagged that quarterly sales at the handset division fell short of Wall Street expectations of $6.478 billion.

Automotive and IoT now collectively represent nearly 30% of QCT sales, with the automotive segment seeing tailwinds from growing adoption of its Snapdragon-based digital cockpits and ADAS platforms.

For the final quarter of its current fiscal year, Qualcomm guided for revenue of between $10.3 billion and $11.1 billion, in-line with analysts’ estimates of $10.6 billion at the midpoint. Its per-share earnings guidance came in at $2.75 to $2.95, compared to consensus forecasts of $2.82.

(Scott Kanowsky contributed reporting.)