The mobile phone market remains sluggish, with Qualcomm's second-quarter revenue falling 23% more than expected. The guidance is lower than expected, causing the stock to drop nearly 7% after hours. | Earnings Report
Qualcomm's revenue and profits in the third quarter, or the second quarter, both experienced a significant and accelerated decline. The earnings per share (EPS) were slightly higher than expected, with a year-on-year decrease of nearly 40%. The revenue guidance for this quarter indicates a maximum year-on-year decline of 29%, and both the EPS guidance and the highest expected EPS decline are expected to exceed 42%. This is the latest update.
Although Intel and AMD have released positive news about the recovery of the personal computer (PC) market, mobile chip giant Qualcomm has not been able to escape the predicament and continues to suffer from the decline of the smartphone market.
After the earnings report was released, Qualcomm's stock price fell more than 2.1% on Wednesday and accelerated its decline after hours, with the after-hours decline currently expanding to nearly 7%.
After the US stock market closed on Wednesday, August 2, Qualcomm announced that in the company's third fiscal quarter (referred to as the "second quarter") ending June 25, 2023, the company's revenue and profits both accelerated their decline compared to the previous quarter. Among them, the revenue unexpectedly dropped by more than 20%, and although the earnings per share (EPS) were slightly higher than expected, the decline was also close to the expected 40%.
- Non-GAAP adjusted revenue for the second quarter was $8.442 billion, a year-on-year decrease of 23%. Analysts expected a year-on-year decrease of about 22% to $8.51 billion, and a year-on-year decrease of 17% in the first quarter.
- Adjusted EPS for the second quarter was $1.87, a year-on-year decrease of 37%. Analysts expected a year-on-year decrease of nearly 39% to $1.81, and a year-on-year decrease of 33% in the first quarter.
- Net profit for the second quarter was $2.105 billion, a year-on-year decrease of 37%, and a year-on-year decrease of 34% in the first quarter; Earnings Before Tax (EBT) for the second quarter was $2.43 billion, a year-on-year decrease of 38%, and a year-on-year decrease of 33% in the first quarter.
In terms of performance guidance, Qualcomm expects revenue for the fourth fiscal quarter, i.e., the third quarter of 2023, to be between $8.1 billion and $8.9 billion, a year-on-year decrease of nearly 22% to 29%, with a median of $8.5 billion, which is lower than analysts' expected $8.79 billion; Adjusted EPS for the third quarter is expected to be between $1.8 and $2.0, a year-on-year decrease of 36% to 42.5%.
Qualcomm's CEO stated that as the scope of artificial intelligence (AI) use cases expands, AI on devices has the potential to drive a turning point for all of Qualcomm's products. Qualcomm is still in the most advantageous position to lead this AI transformation because its platform has unparalleled acceleration computing performance and energy efficiency.