Published on 31 Jan 2023 on Zacks via Yahoo Finance
Will Soft Revenues Impact Qualcomm's (QCOM) Q1 Earnings?
Qualcomm Incorporated QCOM is set to report first-quarter fiscal 2023 results on Feb 2, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 0.32%. It pulled off a trailing four-quarter earnings surprise of 5.36%, on average.QCOM, one of world’s leading digital wireless telecom products and service provider, is expected to have recorded lower year-over-year revenues due to falling demand for its smartphone chips amid global uncertainty.
Factors at Play
Qualcomm is concentrating on creating autonomous driving technologies to diversify its commercial portfolio. Its Snapdragon digital chassis offer a comprehensive set of connected automotive platforms for telematics and connectivity, computing, and driver assistance and autonomy. In addition to immersive experience, it offers augmented reality-based navigation systems, engine noise suppression capabilities and in-cabin monitoring. Business diversity could benefit its first-quarter profitability and put it in a better position to withstand macroeconomic challenges.Qualcomm anticipates a fall in demand for its handset chips as the December quarter is likely to have witnesses the worst smartphone shipment volume in the last 10 years, down 17% from the prior-year quarter’s levels. High inventory combined with low demand situations in post-pandemic period forced vendors to reduce shipments drastically. The company had decreased its outlook for smartphone shipments from a mid-single-digit fall to a low-double-digit percentage decline, signaling a downtrend in the handset market.Rising geopolitical tension in Europe and Asia is fuelling global instability and adding to the macroeconomic challenges. These elements are probably going to hurt the company’s first-quarter revenues.For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $9,700 million, indicating a decline of 9.3% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at $2.35, suggesting a contraction from $3.23 recorded in the year-earlier quarter.