Qualcomm Announces Mixed Fiscal Q3 2023 Results, QCOM Shares Drop Nearly 7%

Qualcomm Inc (NASDAQ: QCOM) shares closed Wednesday trading at $129.27, down 2.13 percent from the day’s opening price. The losses in QCOM shares were exaggerated during the after-hours session with another drop of approximately 6.86 percent. The sudden decline was attributed to the mixed earnings results for the third quarter that ended on June 25, 2023. According to the Q3 2023 announcement, Qualcomm reported an adjusted revenue of $8.44 billion whereas analysts surveyed by Refinitiv expected the company to report $8.5 billion. Additionally, the American semiconductor and tech manufacturing company announced adjusted earnings per share of about $1.87, whereas analysts surveyed by Refinitiv expected $1.81.

Nonetheless, the company remains optimistic about a better future driven by the mainstream adoption of artificial intelligence (AI) products.

“As AI use cases proliferate to the edge, on-device AI has the potential to drive an inflection point across all our products. Qualcomm remains best positioned to lead this transition given the unmatched accelerated computing performance with the power efficiency of our platforms,” Cristiano Amon, President and CEO of Qualcomm Incorporated, noted.

Qualcomm Q3 2023 Financial Statement and Market Outlook

In Q3 2023, Qualcomm returned $1.3 billion to shareholders, including $893 million of cash dividends paid. Additionally, the company announced it used about $400 million in facilitating a 4 million share buyback program of its common stock. During the third quarter, the company announced that the best-performing sector was the automotive industry, which reported a revenue of about $434 million, up approximately 13 percent from the same time last year. Notably, the company’s handset segment reported a revenue of about $5.25 billion, down approximately 25 percent from the same time last year.

Qualcomm’s Internet of Things segment reported a revenue of about $1.48 billion, down approximately 24 percent from the same time last year.

As for the fourth quarter, the company announced that it expects earnings of between $1.80 and $2 per share on between $8.1 billion and $8.9 billion in revenue, which fell short of analysts surveyed by Refinitiv, who had an expectation of $1.91 in earnings per share on $8.7 billion in revenue.

The company highlighted that the handset is difficult to predict, especially with a slow recovery of smartphone shipments in China.

“Handset remains difficult to predict the timing of a sustained recovery and customers remain cautious with purchases,” Qualcomm finance chief Akash Palkhiwala said on an earnings call with analysts.

Meanwhile, Qualcomm shares have gained approximately 21 percent in the past three months, an indication that its long-term investors are pleased with the performance and its market outlook.