The company said Wednesday that revenue for the period ending in March will range from $10.3 billion to $11.2 billion. Of that, the company’s licensing business generates between $1.25 billion and $1.45 billion. This is compared to the average analyst forecast of $1.4 billion.
The outlook for the technology licensing business, based on forecasts of the number of mobile phones on sale, has raised some analysts question Qualcomm’s industry outlook.
Chief Financial Officer Akash Palkhiwala said the company expects the overall market to be flat or a single digit lower in 2025. That forecast does not include revenue from China-based Huawei Technologies Co., which is renegotiating its license with Qualcomm, executives said.
Qualcomm’s business outlook is consistent with Analyst Farm IDC, predicting global smartphone shipments will be “low single digits” in 2025.
The shares fell about 5% in extended trading after closing at $175.86 in New York. Stocks rose 14% this year.
Other smartphones, Stalwarts Arm Holdings Plc and Skyworks Solutions Inc., have been delayed in trading after making forecasts that have not reached the forecasts of some analysts. The results of the company have raised investors concerns about the growth of the entire industry.
San Diego-based chip makers collect fees calculated as a percentage of the cost of mobile phones, regardless of whether the phone makers use chips or not. Qualcomm has established that it is possible to acquire these rights in intellectual property litigation around the world and claim royalties on patents that cover the basic way telephones connect with the network.
The overall smartphone market hasn’t grown as rapidly as it has in the past, but Qualcomm’s strength as a semiconductor provider for expensive devices such as the Galaxy Range from Samsung Electronics Co., will help drive growth . The company’s efforts to expand outside the central market are also expanding to automobiles and personal computers, which drive revenue.
In the first quarter, Qualcomm reported earnings of $3.41 per share, with the exception of some items. Revenues rose 17% to $11.7 billion. Analysts estimated profits of $2.97 per share and revenues of $10.9 billion.
Telephone-related sales rose 13% to $7.57 billion during the period December 29th, with an average forecast of $7 billion. The chips used in the vehicle had revenue of $961 million. The connected device chips sold $1.55 billion.
One of Qualcomm’s biggest customers, Apple Inc. uses its modem chips on the iPhone, but is working to replace that component with an in-house version. Qualcomm, which has been running business from Apple for longer than many people expected, has repeatedly warned investors that its revenue stream will reach zero. Creating its own phone chips, Samsung has increased the amount of models based on components from US chip makers.
