Qualcomm sees earnings below Street estimates as smartphone market sags

BENGALURU/OAKLAND, Calif (Reuters) – Qualcomm Inc forecast second-quarter revenue and profit below Wall Street estimates on Thursday as the chipmaker grapples with the combined toll of weak demand for smartphones and a supply glut, a situation that is expected to persist into the first-half of this year.

Inflation and macroeconomic uncertainty have hurt consumer electronics sales, and while Qualcomm has been somewhat buffered by its focus on premium smartphones, analysts said even that market has been hit.

The stock, which initially rose 2.7% in after-hours trading, fell 3%.

“The handset industry continues to experience reduced demand, and we are now expecting elevated channel inventory levels to persist at least through the first half of calendar 2023,” Cristiano Amon, Qualcomm CEO told investors.