Qualcomm Q4 preview: Will weak Android demand continue to hurt the chipmaker?
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Qualcomm (NASDAQ:QCOM) is scheduled to announce Q4 earnings results on Wednesday, November 2nd, after market close.
The chipmaker had a weaker-than-expected guidance for Q4 at the time of its last quarterly report. It expects smartphones to see a "mid-single digit" decline year-over-year, citing weakness in mid-tier Android handsets, with 5G handsets now expected to be between 650M-700M for the year, down from a prior outlook.
Analysts have since trimmed estimates to reflect the challenges during the quarter. Both Morgan Stanley and Bernstein trimmed their estimates on the chipmaker, citing weaker smartphone market and lackluster Android demand. Over the last 3 months, EPS estimates have seen 2 upward revisions and 6 downward. Revenue estimates have seen 1 upward revision and 7 downward.
The consensus EPS Estimate is now $3.13 (+22.7% Y/Y) and the consensus Revenue Estimate is $11.36B (+21.6% Y/Y).
KeyBanc's latest semiconductor report highlighted ongoing headwinds from weak China smartphone sell-through and the Android inventory correction, although Qualcomm may benefit from iPhone 14 demand and the ramp of nextgen SnapDragon APs for new China OEM and Samsung GS23 launches.
Investors will be wary of more guidance trims as Qualcomm (QCOM) enters the new fiscal year. Fellow chipmaker Intel (INTC) cut its full-year revenue outlook in its latest earnings and announced broad cost-cutting measures, including job cuts.
Meanwhile, HSBC analyst Frank Lee sees Qualcomm as "the most complete technology offering" compared to peers Intel and Advanced Micro Devices (AMD), calling it "well-positioned for growth" beyond smartphone chips.

Qualcomm has a good track record of beating street estimates according to a recent preview by an SA contributor. Over the last 2 years, the chipmaker has beaten EPS estimates 100% of the time and has beaten revenue estimates 88% of the time.