Qualcomm Earnings Look-ahead: Smartphone market in focus, over $8 billion revenue expected
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With Qualcomm Inc (NASDAQ:QCOM) set to report its third quarter results on Wednesday, investorsâ interests would be in knowing how much the smartphone market has recovered.
Wall Street analysts expect Qualcomm to post earnings per share (EPS) of $1.81, while revenue is expected to be $8.51 billion, representing a fall of nearly 21.9%.
The smartphone market took a hit from runway inflation as consumers held back spending on discretionary items including electronic products, hurting smartphone chipmakers like Qualcomm as vendors slashed their orders.
According to latest data from Counterpoint, the global smartphone marketâs sell-through declined 8% YoY and 5% sequentially in second quarter of 2023, making it an eighth consecutive quarter to see a YoY decline.
CEO Cristiano Amon during the companyâs second-quarter earnings call said that there is expectation for a rebound in demand for handsets in China during the second half of the year but the company âhave not seen evidence of meaningful recovery and are not incorporating improvementsâ into its planning assumptions.
However, Bernstein analyst Stacy Rasgon said while Qualcommâs results are likely to show continued weakness in smartphones, the company could benefit from other adjacent stories, including PCs, virtual and augmented reality, as well as the "recent chatter" that Apple (AAPL) could use the company's modem technology for longer than initially thought.
Earlier in July, the San Diego, California-based company said that it is teaming up with Meta Platforms (META) to bring large language models to run on smartphones and PCs, starting next year.
Over the last 2 years, Qualcomm has beaten EPS estimates 75% of the time and has beaten revenue estimates 88% of the time. The stock rose nearly 22% so far this year.
While Seeking Alpha analysts and Wall Street rated the stock a âbuyâ, Seeking Alphaâs Quant Ratings consider the stock a âholdâ with a score of 3.12.
Over the last 3 months, EPS and revenue estimates have seen no upward revisions, compared to 19 and 17 downward moves respectively.

Last month, chipmaker Intel Corp (INTC) posted surprise quarterly profit and a strong guidance for the first-quarter, while Taiwan Semiconductor Manufacturing Company (TSM) said second-quarter revenue declined and it offered a weak outlook.