Qualcomm Tops Estimates, Forecasts 30% Cut in Mobile Handset Shipments

Qualcomm shares gain in after-hours trading following better-than-expected financial results for its fiscal second quarter.
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Qualcomm Inc.  (QCOM) - Get Report topped revenue and earnings estimates for its fiscal second quarter but offered a cautious outlook amid the COVID-19 pandemic.

The company posted adjusted earnings per share of 88 cents on $5.2 billion in revenue for the period. It had been expected to make 79 cents a share on sales of $5 billion.

In the same period a year ago, the company posted earnings of 77 cents a share on sales of $4.9 billion.

Qualcomm said it is forecasting non-GAAP diluted EPS for the current quarter of between 60 cents and 80 cents.

“Given the uncertainty caused by the COVID-19 pandemic, including the timing and pace of economic recovery, our guidance for the third quarter of fiscal 2020 is based on a planning assumption that there will be an approximate 30% reduction in handset shipments relative to our prior expectations, resulting in an estimated impact of greater than ($0.30) to EPS in the third quarter of fiscal 2020,” the company said in a statement.

Qualcomm said its second quarter saw a reduction in demand for mobile “handsets of approximately 21% compared to our prior expectation and on a year-over-year basis.”

The company said its GAAP results for the period were hurt by $265 million in “non-marketable investment impairments, resulting in part from the impacts of COVID-19.”

Shares of Qualcomm rose 2.53, or 3.2%, to $81.50 in after-hours trading. The stock gained 4.9% in the regular session on a strong day for markets driven by hopes of a new treatment for COVID-19 and the Federal Reserve’s continued efforts to backstop the U.S. economy.