NEW YORK (TheStreet) -- Qualcomm (QCOM) - Get Report stock is lower by 5.74% to $44.80 in late-morning trading on Thursday, after the wireless technology company reported its 2016 first quarter financial results and second quarter outlook yesterday afternoon.
While reporting a first quarter earnings and revenue beat on Wednesday, the company also warned that earnings and revenue for the second quarter will likely be below analysts' projections.
The company now expects second quarter earnings to range between 90 cents and $1 per share on revenue between $4.9 billion and $5.7 billion, as demand for Qualcomm's chips for mobile devices has weakened and competition has strengthened.
Analysts have projected for earnings of $1.02 per share on revenue of $5.69 billion for the quarter.
"Their issues are structural and not going away," Stacy Rasgon, an analyst at Sanford C. Bernstein, told Bloomberg. "The market is saturating. The competitive environment is getting worse."
Additionally, a contract dispute with LG is costing Qualcomm more than $100 million per quarter. LG alleges that it overpaid royalties to Qualcomm.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C+.
Qualcomm's strengths such as its expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures are countered by weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
You can view the full analysis from the report here: QCOM
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.