Qualcomm just learnt that beating expectations is pointless if the guidance smells even slightly off.
Qualcomm posted record fiscal first-quarter revenue of $12.25bn and non-GAAP earnings per share of $3.50, topping forecasts, yet the shares fell 6.6 per cent in after-hours trading. Investors fixated on a cautious outlook that management blamed on industry-wide memory constraints hitting handset customers.
Qualcomm, president and chief executive Cristiano Amon said: “We are pleased to deliver strong quarterly results, with record total company revenues,” and pointed to flagship phones making piles of cash. Qualcomm CDMA Technologies delivered record revenue of $10.6bn, while handset revenue reached a record $7.82bn as recently launched premium devices were sold.
Licensing remained a fat earner, with QTL revenue of $1.6bn and a 77 per cent earnings before taxes margin, helped by mix and higher volumes. Qualcomm also returned $3.6bn to shareholders.
The rough bit is DRAM, with suppliers shovelling capacity towards high-bandwidth memory for AI data centres, tightening mainstream DRAM supply for consumer kit. That squeeze is pushing some handset makers, especially in China, to trim build plans and run down chipset inventory.
Qualcomm guided fiscal second-quarter revenue of $10.2bn to $11.0bn, below the $11.02bn analysts had expected, with QCT handset revenue flagged at about $6.0bn.
Amon said: “While our near-term handsets outlook is impacted by industry-wide memory supply constraints, we are encouraged by end-consumer demand for premium and high-tier smartphones. ”
Away from phones, the diversification story is doing its job, with QCT automotive revenue up 15 per cent to $1.1bn for a second straight billion-dollar quarter. Qualcomm is guiding more than 35 per cent automotive growth in fiscal Q2 and keeps banging on about IoT momentum, with that segment up nine per cent to $1.69bn.
The outfit is building data centre CPU and AI platform ambitions, including the Alphawave deal, with revenue expected to start landing in 2027, which is great if you can persuade the cocaine nose jobs of Wall Street to think beyond the next handset cycle.
