Qualcomm's Q3 Forecast Dips Amid Memory Chip Shortage

Key Forecast Highlights

Qualcomm has projected its third-quarter revenue and adjusted profit below Wall Street expectations, citing a global shortage of memory chips that has impacted demand for consumer electronics. The company's shares fell approximately 4% in extended trading following the announcement.

Global Market Overview

The consumer electronics industry is currently facing a significant memory chip crunch, which has led to increased costs for smartphones and PCs. This has prompted consumers to reduce spending. According to Counterpoint Research, global smartphone shipments declined by 6% in the first quarter of the year, highlighting the widespread impact of the supply chain issue.

Financial Impact and Projections

For its fiscal third quarter, Qualcomm anticipates revenue between $9.2 billion and $10 billion, falling short of the $10.27 billion consensus estimate compiled by LSEG. The company also forecast an adjusted profit of $2.10 to $2.30 per share, compared to analyst expectations of $2.45 per share.

CEO's Outlook

Despite the underwhelming forecast, Qualcomm CEO Cristiano Amon expressed confidence that the smartphone market has reached its lowest point. He stated, "We can now call the bottom," suggesting a rebound is expected after the fiscal third quarter, based on insights from the company's licensing business.

FAQ

Q: Why did Qualcomm forecast lower-than-expected revenue?
A: The forecast reflects a hit to demand stemming from a global shortage of memory chips used in smartphones and other consumer electronics.

Q: How did the market react to Qualcomm's forecast?
A: The company's shares declined by around 4% in after-hours trading.

Q: What is Qualcomm's long-term view of the smartphone market?
A: The company's CEO believes the market has hit a bottom and is expected to start rebounding after its fiscal third quarter.

Source: Investing.com