Shulou(Shulou.com)11/24 Report--

CTOnews.com May 4 news, Qualcomm today announced the second quarter ended March 26 results, quarterly revenue and profit are lower than Wall Street expectations. Qualcomm said it would take longer for the smartphone industry to run out of excess chip inventory before new orders arrived, and Qualcomm expects chip revenue of $6.9 billion to $7.5 billion.

Qualcomm's revenue for the quarter was $9.275 billion (currently about 64.183 billion yuan), down 17% year-on-year; net profit was $1.704 billion (currently about 11.792 billion yuan), down 42% year-on-year, according to the financial report.

Qualcomm shares fell nearly 7% in after-hours trading on the news. As of CTOnews.com, Qualcomm's U.S. stocks were down 6.59% after hours. Earlier, the company said its forecast also factored in macroeconomic headwinds and weak global handset sales.

While Qualcomm hopes smartphone sales in China will recover in the second half of the year, CEO Cristiano Amon told investors on a conference call,"We don't see evidence of a meaningful recovery or incorporate improvements into our planning assumptions. "

The company said its chip revenue forecast fell more than normal from the previous quarter, mainly due to "the timing of chip purchases by a modem-only mobile phone customer."

Qualcomm did not name the customer, but Summit Insights Group analyst Kinngai Chan said the customer is Apple Inc., which will produce its own application processor. Apple is the largest buyer of Qualcomm baseband chips, not the main flagship chip that includes baseband and AP.

Canalys analyst Runar Bjorhovde said:"MediaTek is vigorously entering the high-end market." Qualcomm is very willing to cooperate with any company that can help it further develop into the high-end market. I think Samsung is a big customer that Qualcomm needs to protect. "

Amon said that when Huawei withdrew from the smartphone market, Apple captured some of the high-end phone market share, resulting in a net loss on Android phones equipped with Qualcomm's flagship processor.

Qualcomm Chief Financial Officer Akash Palkhiwala said used phones are also starting to cannibalize sales of high-end phones, noting that this has been incorporated into Qualcomm's estimates and that the company is watching closely.

Qualcomm expects third-quarter revenue of $8.1 billion to $8.9 billion (currently about Rmb61.588 billion), below Refinitiv analysts 'estimates of $9.14 billion. The company expects adjusted earnings of $1.70-$1.90 per share, versus analysts 'expectations of $2.16.

Segment results: Qualcomm's revenue from devices and services was $7.846 billion in the second quarter, compared with $9.417 billion in the same period last year; revenue from licenses was $1.429 billion, compared with $1.747 billion in the same period last year.

By specific business segment: (1) Qualcomm CDMA Technologies Group's fiscal second quarter revenue was $7.942 billion, down 17% from $9.548 billion in the same period last year; pre-tax profit was $2.107 billion, down 37% from $3.340 billion in the same period last year; pre-tax profit accounted for 27% of revenue, compared with 35% in the same period last year, down 8 percentage points from a year earlier.

Within CDMA Technologies Group: -Revenue from the mobile chip business was $6.105 billion in the second quarter, down 17% from $7.349 billion in the same period last year;

- Revenue from the automotive chip business was $447 million in the second quarter, up 20% from $371 million in the same period last year.

- Revenue from the Internet of Things business in the fiscal second quarter was $1.39 billion, down 24% from $1.828 billion in the same period last year.

(2) Qualcomm Technology Licensing Group's fiscal second quarter revenue was $1.29 billion, down 18% from $1.58 billion in the same period last year; pre-tax profit was $871 million, down 25% from $1.154 billion in the same period last year; pre-tax profit accounted for 68% of revenue, compared with 73% in the same period last year, down 5 percentage points from a year earlier.

Costs and expenses: Qualcomm's total operating costs and expenses for the fiscal second quarter were $7.185 billion, compared to $7.306 billion in the same period last year. Revenue costs were $4.153 billion, compared with $4.648 billion a year earlier; research and development expenses were $2.210 billion, compared with $2.034 billion a year earlier; sales, general and administrative expenses were $614 million, compared with $624 million a year earlier; and other expenses were $208 million, compared with zero a year earlier.

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