Qualcomm Shares Fall 5% as Higher Costs, Apple-Related Weakness Cloud Profit Forecast
Qualcomm said handset chip revenue fell 20% as it plans September 1 price increases to offset higher supply chain costs.
- On Wednesday, Qualcomm reported third-quarter earnings and forecast fourth-quarter revenue between $9.7 billion and $10.5 billion while warning that Apple-related revenue would decline faster than expected.
- Supply constraints and rising input costs across the chip manufacturing supply chain pressured margins, prompting CEO Cristiano Amon to announce price increases beginning September 1. "Cost went up, prices are going to go up," Amon told CNBC.
- Handset chip revenue dropped 20% to $5.1 billion in the third quarter, while automotive sales climbed 61% to $1.59 billion and extended the segment's streak to 23 consecutive quarters of double-digit growth.
- Qualcomm acquired AI software startup Modular Inc. for $3.92 billion on Wednesday and targets $5 billion in data center revenue by fiscal 2027, scaling to $15 billion by 2029.
- Chief Financial Officer Akash Palkhiwala expects growth in non-handset businesses to replace all Apple-related revenue lost from fiscal 2026, positioning the company within the fast-growing AI data-center market.
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Qualcomm shares fall 5% as higher costs, Apple-related weakness cloud profit forecast
Qualcomm's stock has seen a notable drop following its alert about escalating memory costs. Increased expenditures and rising prices are expected to strain profit margins in the immediate future. The firm has projected an adjusted earnings per share that falls short of analysts' estimates. Additionally, Qualcomm's share in the modem supply for the upcoming iPhone will significantly decrease.
Qualcomm shares slide as higher costs, Apple-related weakness cloud profit forecast
Qualcomm shares fell about 5% on Thursday after the chipmaker's warning about higher memory costs and a steeper decline in revenue from Apple raised concerns about near-term profit growth.
Qualcomm's profit slid as higher costs squeezed margins and Apple chip revenue shrank faster than expected
The chipmaker plans to raise prices starting September 1 to offset industry-wide cost increases, while its outlook for the current quarter came in below analyst expectations
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