Qualcomm shares fell Thursday after the wireless-chip maker delivered a mixed March-quarter report and guided below Wall Street's targets for the June quarter. QCOM shares slumped more than 5% on the news.
The San Diego-based company late Wednesday said it earned an adjusted $2.15 a share on sales of $9.28 billion in its fiscal second quarter ended March 26. Analysts polled by FactSet had expected earnings of $2.15 a share on sales of $9.09 billion. On a year-over-year basis, Qualcomm earnings declined 33% while sales dropped 17% as it navigates a slowdown in smartphone sales.
For the current quarter, Qualcomm predicted adjusted earnings of $1.80 a share on sales of $8.5 billion. However, Wall Street was forecasting earnings of $2.17 a share on sales of $9.13 billion in the June quarter.
Qualcomm said its fiscal third-quarter outlook reflects continued macroeconomic headwinds, weaker global handset sales and channel inventory drawdown.
QCOM Stock Sinks After Report
On the stock market today, QCOM stock dropped 5.5% to close at 106.58. During the regular session Wednesday, QCOM stock slid 2.8% to close at 112.83.
"As we navigate this challenging environment, we remain focused on the critical factors we can control to emerge stronger from this downturn — our leading technology roadmap, best-in-class product portfolio, strong customer relationships and operational efficiencies," Chief Executive Cristiano Amon said in a news release.
More than a dozen Wall Street firms cut their price targets on QCOM stock after the company's disappointing report.
Qualcomm now expects global smartphone unit sales to decline in the high single-digit percentage range this year vs. its prior outlook for a low single-digit drop. It noted that demand for smartphones has deteriorated and remains weak in China.
However, much of Qualcomm's weak guidance is company-specific, with orders from customer Apple drying up, UBS analyst Timothy Arcuri said in a note to clients. He rates QCOM stock as neutral.
QCOM stock ranks No. 14 out of 36 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. Qualcomm has a mediocre IBD Composite Rating of 65 out of 99.
Semiconductor Stocks Retreat
In addition to QCOM stock, other semiconductor stocks moving on earnings reports Thursday included Macom Technology Solutions, Qorvo, SiTime and Synaptics.
Macom, SiTime and Synaptics beat estimates for the March quarter but slashed their outlooks for the June quarter, citing high chip inventories in the sales channel.
On Thursday, Macom stock dropped 3.8%, SiTime crashed 20.7% and Synaptics tumbled 16.2%.
Meanwhile, Qorvo beat March-quarter estimates but offered mixed guidance for the June quarter. However, it predicted a strong snap back in business in the September quarter, thanks to content gains in Apple's iPhone 15 handsets.
Qorvo stock rose 0.4% to close at 93.99 on Thursday.
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