Chip designer Qualcomm Inc reported a Q3 revenue and profit forecast below Wall Street estimates, citing concerns that the smartphone industry would take longer to exhaust excess supply before fresh orders come in. The company’s forecast also took into account macroeconomic headwinds, weaker global sales of handsets, and channel inventory drawdown. Qualcomm’s CEO, Cristiano Amon, said the company would remain focused on executing its diversification strategy and investing in areas that drive long-term value. Qualcomm attributed a larger-than-normal decline in its chip revenue forecast to the timing of purchases by a modem-only handset customer, which analysts believe to be Apple.
The smartphones market has been hit hard by declining demand since high inflation curbed consumer spending on discretionary goods like electronics. Despite promotions and price cuts, global smartphone shipments fell 13% in Q1. The company forecast revenue of $8.1 billion to $8.9 billion in Q3, while analysts polled by Refinitiv expected revenue of $9.14 billion. It estimated adjusted earnings per share of $1.70 to $1.90, compared to analysts’ expectations of $2.16.