Qualcomm Inc. (QCOM - Get Report) shares traded lower Thursday after the chipmaker posted weaker-than-expected third quarter sales and cautioned that it might not see a benefit from 5G network rollouts until next year.

Qualcomm said adjusted earnings for the three months ending in June, the company's fiscal thrid quarter, came in at 80 cents per share, topping the Street consensus forecast of 77 cents but falling 20% from the same period last year. Group revenues, Qualcomm said, fell 13% to $4.9 billion, a figure that narrowly missed analysts' forecast.

The company also said that the U.S. blacklisting of China's Huawei Technologies has pushed the world's biggest smartphone maker into focusing on market share gains on its home turf, a move that has limited orders for new phone chips from Qualcomm customers such as Oppo, Vivo and Xiaomi Corp. 

"The Huawei export ban, along with the pivot from 4G to 5G which accelerated over the past couple of months, has contributed to industry conditions particularly in China that we expect will create headwinds in our next two fiscal quarters," CEO Steve Mollenkopf told investors on a conference call late Wednesday. "As a result of the export ban, Huawei shifted their emphasis to building market share in the domestic China market, where we do not see the corresponding benefit in product or licensing revenue."

"In addition, our customers in the China market are working through their existing 4G inventory and deemphasizing their second half 2019 4G launches, as they shift their priorities to their 5G launches in early 2020," he added. "As a result, we do not expect the typical seasonal benefits given this unique market dynamics."
Qualcomm shares were marked 2.4% lower Thursday to change hands at $71.38 each, a move that would trim the stock's year-to-date gain to around 24%.
Looking into the current quarter, Qualcomm said it sees earnings in the range of 65 cents to 75 cents per share, well below the $1.08 Refinitiv forecast, and revenues of between $4.3 billion and $5.1 billion, which also trailed Street expectations.
"Smartphone makers have largely given up on releasing new high-end smartphone models based on current technology and consumers are delaying their purchases before 5G's rollout," said Fubon Securities analyst Sherman Shang. "Therefore, the near-term outlook looks soft but Qualcomm expects demand to improve from new 5G services as soon as in 1Q20."
"In addition, Qualcomm has reduced its projection for total market size this year by around 100mn units," he added.