Qualcomm falls on disappointing sales even as adjusted earnings beat expectations

FILE PHOTO: A Qualcomm sign is pictured at Mobile World Congress (MWC) in Shanghai, China June 28, 2019. REUTERS/Aly Song/File Photo
FILE PHOTO: A Qualcomm sign is pictured at Mobile World Congress (MWC) in Shanghai

  • Shares of Qualcomm fell on Thursday after the company announced sales that were slightly lower than analysts’ estimates for the first fiscal quarter.
  • Qualcomm, the world’s largest smartphone chipmaker, reported sales that were up by 63% to $8.24 billion year-on-year.
  • Company President Christian Amon however said the company is expecting a shortage in semiconductors  “to normalize toward the later part of 2021 as capacity is put in place.”
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of Qualcomm fell as much as 8% Thursday after the company announced sales that were slightly lower than analysts’ estimates for its fiscal first quarter.

Qualcomm, the world’s largest smartphone chipmaker, reported sales that were up by 63% to $8.24 billion year-on-year. Adjusted revenue was slightly lower than consensus at $8.23 billion versus the expected $8.27 billion. Adjusted earnings grew 199% to $2.17 per share versus Wall Street’s estimate of $2.10

If not for a worldwide semiconductor shortage, newly appointed company president Christian Amon said revenue would have been higher.

We have seen, I think, probably shortages across the entire industry,” Amon said in the earnings call on Wednesday.

The demand for chips that run computers and cars, among other devices, cannot be met by some suppliers in Asia. Amon however said the company is expecting “this to normalize toward the later part of 2021 as capacity is put in place.”

Still, both revenue and earnings showed strong growth year-on-year due in large part to the electronics boom brought about by the pandemic when most of the global economy shut down, forcing people to stay at home.

The San Diego, California-based company added that it is targeting $7.2 billion to $8 billion in sales in the current quarter – higher than Wall Street estimates. 

Last month, Qualcomm announced that Amon will succeed Steve Mollenkopf after seven years as CEO.

Read the original article on Business Insider