Smartphone chip maker Qualcomm Inc. gave a lackluster revenue outlook for the current quarter, raising concerns that higher prices due to a shortage of memory chips could curb demand for mobile phones. Qualcomm shares tumbled in after-hours trading.
Qualcomm released its financial report after the market closed on Wednesday, saying that its second-quarter revenue is expected to reach 10.2 billion to 11 billion U.S. dollars. Excluding some items, earnings per share were expected to be $2.55. Analysts' average forecasts were for revenue of $11.2 billion and earnings of $2.89 per share, according to data compiled by Bloomberg.
Qualcomm said that although there is still demand for high-end mobile phones, the production of mobile phones by some customers, especially those in China, will be lower than expected due to tight supply of memory chips and sharp price increases. Qualcomm Chief Executive Officer Cristiano Amon is pushing to transform the company and diversify its business by increasing chip sales for cars, personal computers and data centers, but the scale of these new businesses is still not enough to make up for the slowdown in the mobile phone chip market.
"Although our mobile phone chip business outlook in the short term is affected by industry-wide supply constraints of memory chips, we remain encouraged by demand for high-end smartphones," Amon said in a statement.
Qualcomm shares closed at $148.89 in New York on Wednesday, down about 9% after hours. The stock has fallen 13% this year.
In the first fiscal quarter ended December 28, Qualcomm earned US$2.78 per share after excluding some items; revenue for the quarter increased by 5% to approximately US$12.3 billion. Analysts had expected earnings of $3.41 per share and revenue of $12.2 billion.