Qualcomm sees earnings below Street as smartphone market sags

Its fiscal first quarter revenue dropped 12% year-on-year to $9.46 billion, below Wall Street expectation of $9.60 billion as Qualcomm also grapples with weak demand for smartphones and a supply glut.

Smartphone shipments dropped 18.3% in the quarter ended Dec. 31 marking the largest ever quarterly slump, according to data from research firm IDC, as even the holiday shopping season could not revive battered consumer spending.forecast downbeat earnings as its customers continued to clear bloated inventory. Analysts at Cowen expect smartphone shipments will fall 4% this year as recovery in China demand will take some time following a big COVID-19 outbreak.

First quarter revenue from Qualcomm's handset business, which makes up the largest chunk of total sales, fell 18% on year to $5.75 billion, compared to a 40% growth in the previous quarter. It expects adjusted earnings per share to be between $2.05 and $2.25, compared to analysts expectations of $2.26 per share.

Reporting by Chavi Mehta in Bengaluru and Jane Lanhee Lee in Oakland; Editing by Shailesh Kuber and Anna Driver

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