Qualcomm Inc (NASDAQ:QCOM, XETRA:QCI) shares fell about 3% on Thursday after the chipmaker reported third quarter earnings that narrowly missed expectations and issued a weaker-than-expected profit outlook for the upcoming quarter.
For the fiscal third quarter ended June 28, Qualcomm reported adjusted earnings per share of $2.21, slightly below Wall Street expectations of $2.22.
Revenue came in at $9.95 billion, ahead of analyst estimates of about $9.71 billion, but declined 4% from the same period a year earlier.
On a GAAP basis, Qualcomm reported earnings per share of $1.87 and net income of $2 billion, down 25% year-over-year. Non-GAAP net income declined 23% to $2.36 billion.
The company’s Qualcomm CDMA Technologies (QCT) segment generated revenue of $8.5 billion, down 5% year-over-year, while Qualcomm Technology Licensing (QTL) revenue declined 3% to $1.28 billion.
Qualcomm highlighted growth in its automotive and IoT businesses, with combined QCT automotive and IoT revenue increasing 28% year-over-year.
“Despite a challenging memory and supply environment, our third quarter results reflect solid execution of our growth strategy, with quarterly revenues at the high end of guidance,” CEO Cristiano Amon said in the company’s earnings statement.
He added that Qualcomm expects non-handset revenue growth to accelerate as the company expands beyond smartphones.
For the fiscal fourth quarter, Qualcomm guided for adjusted earnings per share of $2.05 to $2.25, below analyst expectations of $2.38. Revenue guidance of $9.7 billion to $10.5 billion compared with consensus expectations of around $10.1 billion.
Qualcomm attributed its outlook to higher industry input costs across areas including wafer fabrication, assembly, testing, advanced packaging, memory and other materials. The company said it is taking actions to reflect those higher costs in product pricing, which it expects will support gross margins over time.