It forecast per-share earnings of 80 cents to 90 cents and revenue of $5.2 billion to $6 billion, below estimates of analysts polled by Thomson Reuters for per-share profit of $1.08 and revenue of $5.79 billion. A few progress followed; Qualcomm said on Monday that it had reached a new worldwide licensing pact with ZTE Corp., one of China’s major smartphone makers. Qualcomm sees revenues between $5.2 billion and $6 billion, compared to the $5.74 billion consensus.
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The company’s shares fell almost 6 percent in extended trading on Wednesday.
Fiscal Q4 was the second consecutive quarter that Qualcomm’s earnings and sales have declined year over year.
Qualcomm was hurt also by customer Samsung Electronics Co Ltd’s 005930.KS decision to use an internally developed processor, instead of the Snapdragon chips, for its Galaxy S6 smartphones. As Apple and Samsung post sales gains with new phones that don’t use Qualcomm’s Snapdragon processors, smaller providers that use the chip are shipping fewer phones. GAAP EPS is expected to clock in at $0.62, falling near the midpoint of the company’s guided range of $0.51-0.76.
Underlying the difficulties its chip division is facing, chip shipments totaled 203 million in the recent quarter, down 14 percent from a year earlier, Qualcomm said. The chip biz said that since it struck the settlement deal with the Chinese government’s NDRC regulator, it has been fighting to recover payments from hardware vendors and licensees in China who were under-reporting the number of devices they sold and, in the process, short-changing Qualcomm on royalty payments.
In after-hours trading, Qualcomm stock was down more than 5%. The net income attributable to Qualcomm fell to $1.06 billion, or 67 cents per share, in the fourth quarter ended September 27 from $1.89 billion, or $1.11 per share, a year earlier.
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Investors are still waiting for Qualcomm management’s full response to its change in fortunes. The results were at the high end of the range the company gave three months ago, EPS ex items of 75-95 cents and sales of $4.7 billion-$5.7 billion. In July, the company unveiled plans to cut its workforce by 15 percent, shook up its board membership and is said it was reviewing strategic alternatives, including a breakup.
