Qualcomm Stock Drops on Soft Revenue Outlook

KEY TAKEAWAYS

Qualcomm (

QCOM

) shares are falling in premarket trading Thursday, a day after the chipmaker’s soft current-quarter revenue outlook outweighed better-than-expected fiscal second-quarter results.

The San Diego, Calif.-based company reported adjusted
earnings per share (EPS)
of $2.85 on revenue of $10.98 billion. Analysts polled by Visible Alpha projected $2.82 and $10.63 billion, respectively.

The company, which makes most of its revenue from selling chips for smartphones, including those made by Apple (

AAPL

), said Q2 handset chip sales rose 12% year-over-year to $6.93 billion.

“As we navigate the current macroeconomic and trade environment, we remain focused on the critical factors we can control—our leading technology roadmap, best-in-class product portfolio, strong customer relationships and operational efficiencies,” CEO Cristiano Amon said.

Q3 Revenue Outlook Comes Up Short of Expectations

However, for the third quarter, Qualcomm expects revenue of $9.9 billion to $10.7 billion, with the midpoint below the $10.35 billion consensus estimate.

Qualcomm shares, which entered Thursday down more than 3% this year, are dropping a further 6% in premarket trading.

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