Qualcomm stock dipped in extended trading after the company’s third-quarter results disappointed in terms of sales and guidance.
The company reported adjusted earnings of $1.87 per share, above Street expectations of $1.81 but drastically short of the $3.29 per share it reported a year earlier. Revenue was $8.44 billion, short of the $8.5 billion street consensus.
QCT, Qualcomm’s division that sells processors for smartphones, cars and other devices, posted $7.17 billion in sales, down 24%.
Shares of the company slid 4.1% to $123.95 in after-hours trading.
Qualcomm, which makes the processors used in many Android devices, has been hurt by softening demand in the smartphone industry. Analysts project things to get worse before they get better, with shares of new devices expected to decline in 2023.
CEO Cristiano Amon is banking on Qualcomm’s artificial intelligence (AI) strategy as companies prioritize the chips necessary to run programs such as OpenAI’s ChatGPT.
Qualcomm’s ability to run AI models on phones, as opposed to cloud servers, gives the company a chance for an “inflection point” that could drive growth in the future, he said.
Specifically, Qualcomm guided for earnings between $1.80 and $2 per share and sales between $8.1 billion and $8.9 billion in the fourth quarter. That’s less than the analyst consensus of short $1.91 in earnings per share on $8.7 billion in revenue.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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