Qualcomm posts weaker results amid sluggish global smartphone demand

Mike Freeman, The San Diego Union-Tribune on

Published in Business News

Global economic headwinds that began late last year continue to batter Qualcomm's financial results, with weak demand for smartphones and bloated inventories at manufacturers expected to linger at least through the first half of this calendar year.

While the wireless technology firm reported solid financial results Thursday for its fiscal first quarter ended Dec. 25, its outlook for the current quarter came up short of Wall Street analysts' forecasts.

San Diego's largest publicly traded company indicated that it would "actively manage operating expenses" to navigate the current slowdown, said Chief Executive Cristiano Amon in a conference call with Wall Street analysts.

"Combined with the actions we have already taken in the quarter, we expect to reduce non-GAAP operating expenses by approximately 5 percent relative to the run rate exiting fiscal 2022," he said.

The company did not disclose details of how it might trim costs. But it expects to continue to invest in automotive, Internet of Things and other areas aimed at diversifying its business beyond smartphones.

Some of the demand weakness seen with smartphones is spreading to the Internet of Things market, said Chief Financial Officer Akash Palkhiwala.


"Uncertainty remains. We are seeing that in handsets and Internet of Things, both from a demand perspective and inventory drawdown," he said. "In terms of the bottom, the way I think about it is we are going to see impact for the March and June quarters, and I think there is an opportunity from that point on as we grow in the second half of the year."

In December, Qualcomm cut about 150 positions at its San Diego headquarters, where it employs roughly 12,500 workers. The company had 51,000 full and part time workers worldwide as of Sept. 25.

Qualcomm joined a slew of technology companies reporting weaker financial results amid a broad economic slowdown and inventory correction, including Apple, Intel, Google parent Alphabet and others.

For the quarter, Qualcomm brought in revenue of $9.5 billion, down 12 percent over the same quarter last year.


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