Key facts
- Qualcomm forecasts Q4 profit between $2.05 and $2.25 per share, below analysts' average estimate of $2.36.
- The company forecasts Q4 revenue between $9.7 billion and $10.5 billion, compared with estimates of $10.02 billion.
- Qualcomm expects revenue from Apple products to decline faster than previously estimated.
- The company plans to increase prices starting September 1 to address rising costs and restore margins.
- Qualcomm's third-quarter revenue was $9.95 billion, a 4% decrease from the previous year, but exceeded estimates.
Qualcomm forecast fourth-quarter profit and revenue below Wall Street expectations, signaling headwinds from supply constraints and rising costs across its business. The company anticipates a faster decline in revenue from Apple products, as supply limitations reduce its share of components for the upcoming iPhone launch to below 20%. CEO Cristiano Amon stated that these supply issues are the primary reason for the reduced Apple share.
To counter increasing costs, Qualcomm plans to implement price hikes starting September 1, aiming to return its margins to historical levels. Amon indicated that the company will negotiate these price adjustments with individual customers, acknowledging a temporary disconnect between costs and pricing that impacts gross margins.
Looking ahead to fiscal 2027, Qualcomm expects the majority of its chip sales to originate from sectors beyond smartphones, with Amon noting that the data center segment is replacing Apple as a key growth area. The company reiterated that revenue from Chinese phone makers has likely bottomed out in the third quarter as inventory levels normalize.
In the third quarter, Qualcomm's revenue decreased by 4% year-over-year to $9.95 billion, surpassing analysts' estimates of $9.67 billion. However, adjusted profit came in at $2.21 per share, slightly below the consensus estimate of $2.23 per share. The company's performance is closely watched as an indicator of broader consumer electronics demand.