January 31, 2023

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Qualcomm Shares fell 7% in extended trading Wednesday after the chipmaker reported an in-line fiscal fourth quarter earnings But offered poor first-quarter guidance.

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Qualcomm also said that it implemented the hiring freeze at the beginning of the current quarter.

Here’s how the company did it:

  • Earnings: According to Refinitiv, $3.13 per share, adjusted, versus $3.13 per share expected by analysts.
  • revenue: According to Refinitiv, $11.39 billion, adjusted, versus $11.37 billion expected by analysts.

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Total revenue grew 22% year-on-year for the quarter ended September 25, according to a statement.

With respect to guidance, Qualcomm called for fiscal first quarter adjusted earnings of $2.25 to $2.45 per share on $10 billion to $9.2 billion in revenue. Analysts polled by Refinitiv were expecting earnings per share of $3.42 and revenue of $12.02 billion.

“Given the uncertainty caused by the macroeconomic environment, we continue to reduce our guidance for calendar year 2022 3G/4G/5G handset volumes from a mid-single-digit percentage decline year-on-year to a low double-digit percentage decline.” Updating for the same,” Qualcomm said in the report. “The rapid decline in demand and easing of supply constraints in the semiconductor industry has resulted in enhanced channel inventory.”

Revenue in the Qualcomm CDMA Technologies, or QCT category, which includes smartphone chips, radio frequency front-end components, automotive chips and Internet of Things devices, totaled $9.9 billion. It was up 28%, and that’s more than a consensus of $9.87 billion among analysts surveyed by StreetAccount.

Within the QCT segment, revenue from mobile handsets is $6.57 billion, up 40% and below the StreetAccount consensus $6.59 billion. Automotive chips grew 58% year over year to $427 million. Qualcomm’s IoT business, which makes low-power chips for connected devices, grew 24% to $1.92 billion. RF front-end chips fell 20% to $992 million.

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Qualcomm Technology Licensing, or QTL, the other major Qualcomm entity, which covers license fees related to 5G and other technologies made by the company, generated $1.44 billion in revenue, up 8% but the $1.58 billion StreetAccount consensus. was less than

On a call with investors on Wednesday, CEO Cristiano Amon said the semiconductor industry is facing macroeconomic headwinds “from which we are not immune.” He said the company has already implemented the hiring freeze and is ready to further cut operating expenses as required.

“We are in a strong position to manage the obstacles we face in the near future,” Amon said. He emphasized during the call that the company is facing a “temporary cyclical inventory drawdown”.

A spokesperson told CNBC that the hiring freeze was implemented in early fiscal 2023.

During the quarter, Qualcomm Told It had extended a patent-licensing agreement with Samsung until 2030. and Arm, which provides the chip architecture used by Qualcomm, filed suit on breach of license agreements and trademark infringement against Qualcomm.

Despite the after-hours move, shares of Qualcomm are down 37% so far this year, while the broader S&P 500 index is down 20% over the same period.

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Correction: Updated to reflect Qualcomm, which reported $6.57 billion in handset revenue. The earlier version reached $6.6 billion.