Qualcomm misses on Q1 revenues, guides Q2 below Street; shares fall

February 2, 2023 4:54 PM EST
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(Updated - February 3, 2023 5:41 AM EST)

Qualcomm (NASDAQ: QCOM) reported its Q1 results, with revenue coming in at $9.46 billion (down 12% year-over-year), missing the consensus estimate of $9.6B. EPS was $2.37, slightly better than the consensus estimate of $2.36.

Qualcomm stock trades about 3.5% lower in pre-market Friday trading.

QCT segment revenue was down 11% year-over-year to $7.892B, while QTL segment revenue dropped 16% year-over-year to $7,892B.

“In a challenging environment, we delivered results consistent with guidance, including year-over-year growth in QCT Automotive and IoT,” said Cristiano Amon, President and CEO of the company. “We are confident in our ability to navigate the near term and remain focused on executing our diversification strategy.”

The company provided its Q2/23 outlook, expecting EPS in the range of $2.05-$2.25, compared to the consensus of $2.26. Q2 revenue is expected in the range of $8.7-9.5B, compared to the consensus of $9.55B.

Piper Sandler analyst Harsh Kumar said the results confirmed that Qualcomm is going through a transition period.

“Although the company guided handsets to be flattish in the March 2022 quarter, we believe that this will be a tough bogey for the company to meet given tough seasonality and macro. We are optimistic about good prospects in 2H23 for QCOM. We reiterate our OW rating,” Kumar said in a note.

Morgan Stanley analyst Joseph Moore said the near-term outlook is better than feared.

“Qualcomm guided March roughly to consensus levels, which should be a relief given anxiety coming in, but the company indicated that difficult conditions would persist; our numbers come down for June, with a modest recovery in 2H,” Moore said after hiking the price target to $145 per share from the prior $126.

By Davit Kirakosyan and Senad Karaahmetovic

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