Qualcomm shares fell Thursday after the wireless-chip giant badly missed views with its outlook for the current quarter on weakening smartphone sales. QCOM stock fell more than 7% on the news.
The San Diego-based company late Wednesday matched earnings estimates in its fiscal fourth quarter on slightly higher than expected revenue. Qualcomm earned an adjusted $3.13 a share on sales of $11.4 billion in the quarter ended Sept. 25. Analysts polled by FactSet expected earnings of $3.13 a share on sales of $11.32 billion. On a year-over-year basis, Qualcomm earnings rose 23% while sales increased 22%.
For the current quarter, Qualcomm forecast adjusted earnings of $2.35 a share on sales of $9.6 billion. That's based on the midpoint of its guidance. However, Wall Street had predicted earnings of $3.43 a share on sales of $12.02 billion in the fiscal first quarter. In the year-earlier period, Qualcomm earned $3.23 a share on sales of $10.7 billion.
"While our financial outlook is being temporarily impacted by elevated channel inventory, our diversification strategy and long-term opportunities remain unchanged," Chief Executive Cristiano Amon said in a news release.
QCOM Stock Drops After Report
"We continue to execute our strategy of transforming Qualcomm from a wireless communications company for the mobile industry to a connected processor company for the intelligent edge," he said.
On the stock market today, QCOM stock dropped 7.7% to close at 103.88. During the regular session Wednesday, QCOM stock sank to 112.50.
Qualcomm now expects smartphone handset volumes to decline by a low double-digit percentage in 2022. It previously forecast a mid-single-digit decline.
The chipmaker said its customers are dealing with elevated semiconductor inventories amid a "rapid deterioration in demand."
Qualcomm Has Middling Composite Rating
Elsewhere among semiconductor stocks, Cirrus Logic stock jumped 4.5% to 70.90 on Wednesday after the audio-chip maker smashed estimates for its fiscal second quarter and guided above views for the current period.
The Austin, Texas-based company earned an adjusted $1.99 a share on sales of $540.6 million in the quarter ended Sept. 24. On a year-over-year basis, earnings rose 9% while sales increased 16%.
Cirrus Logic said the better-than-expected results were from higher unit volumes and high-performance mixed-signal content gains in smartphones. The company gets a big portion of its revenue from supplying chips for Apple iPhones.
QCOM stock ranks seventh out of 34 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. But it has a mediocre IBD Composite Rating of 53 out of 99.
Meanwhile, Cirrus Logic ranks fourth in the group with a Composite Rating of 66.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
