Qualcomm's shares take a dip due to a projected lower revenue estimate
Dropping like a stone - That's what Qualcomm's (QCOM) shares are doing in premarket trading today, taking a nosedive after the chipmaker issued a soft outlook for the current quarter. This unfavorable forecast has overshadowed their better-than-expected fiscal second-quarter results.
Yesterday, Qualcomm reported adjusted earnings per share (EPS) of $2.85 on revenue of $10.98 billion. Analysts had forecasted $2.82 and $10.63 billion respectively. The company, which gets most of its revenue from selling chips for smartphones, including those made by Apple (AAPL), saw a 12% rise in Q2 handset chip sales to $6.93 billion.
"As we navigate the current macroeconomic and trade environment, we remain focused on the critical factors we can control-our leading technology roadmap, best-in-class product portfolio, strong customer relationships and operational efficiencies," CEO Cristiano Amon stated.
However, for the third quarter, Qualcomm predicts revenue to lie between $9.9 billion and $10.7 billion, with the midpoint ($10.3 billion) falling below the consensus estimate of $10.35 billion. This conservative outlook indicates Qualcomm's caution amid ongoing macroeconomic uncertainties and trade policy issues.
This conservative revenue forecast stems from a combination of concerns about tariff-related headwinds and volatile smartphone demand. Despite robust Q2 performance in the automotive (59% growth) and IoT (27% growth) divisions, these factors have overshadowed Qualcomm's strong results.
Qualcomm's shares, already down more than 3% this year, are plummeting a further 6% in premarket trading today, reflecting investors' concerns about the sustainability of growth amid trading risks. Despite beating Q2 estimates (actual revenue of $10.84B vs. expected revenue of $10.63B and EPS of $2.85 vs. $2.83), Qualcomm's dependence on smartphone chip sales (particularly those for Apple) and vulnerability to geopolitical factors continue to drive bearish sentiment.
Pro Tip: Before investing, always do your homework and consider all factors, including geopolitical risks, tariffs, and volatile market conditions.
- Qualcomm's shares, despite beating Q2 estimates, are trading lower in premarket today, as the company predicts third-quarter revenue below the consensus estimate.
- Investors are expressing concerns about the sustainability of Qualcomm's growth amid trading risks and the company's dependence on smartphone chip sales.
- The conservative revenue forecast for the third quarter comes from concerns about tariff-related headwinds and volatile smartphone demand.
- Qualcomm's robust Q2 performance in the automotive and IoT divisions is being overshadowed by the ongoing macroeconomic uncertainties and trade policy issues.
- Yesterday, Qualcomm reported better-than-expected fiscal second-quarter earnings per share and revenue, but the unfavorable forecast for Q3 has caused a nosedive in premarket trading.
- Before investing in Qualcomm, it's important to consider all factors such as geopolitical risks, tariffs, and volatile market conditions.
