Qualcomm stock slips following strong earnings and outlook

Qualcomm Inc. shares slipped in the extended session Wednesday as the chip maker’s quarterly results and outlook topped Wall Street estimates, but certain business segments fell short of expectations.

In its forecast for the second quarter, Qualcomm
QCOM,
+6.25%
said it expects adjusted earnings of $2.80 to $3 a share on revenue of $10.2 billion to $11 billion, while analysts surveyed by FactSet estimated $2.51 a share on revenue of $9.66 billion.

Breaking that down, the company expects sales of CDMA technologies, or QCT, of $8.7 billion to $9.3 billion. QCT includes handset and RF chips as well as chips for autos and Internet of Things. Analysts expect QCT sales of $8.05 billion

The company also forecast sales of Qualcomm’s technology licensing, or QTL, of $1.45 billion to $1.65 billion. while analysts had estimated QTL sales of $1.58 billion.

“Demand remains strong across all of our technologies and continues to exceed supply,” said Cristiano Amon, Qualcomm’s chief executive, on a call with analysts. “Despite ongoing challenges across the global supply chain, our multi-sourcing and capacity-expansion initiatives will provide incremental improvements to our supply throughout the year.” Amon added that supply is expected to get better in the second half of the year.

Total revenue for the holiday quarter rose to $10.71 billion from $8.24 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast revenue of $10.44 billion, based on Qualcomm’s revenue forecast of $10 billion to $10.8 billion.

Qualcomm reported revenue from its QTC segment of $8.85 billion, a 35% gain from a year ago, with strong sales for handset chips making up for lower-than-expected sales of other products. Analysts had estimated $8.69 billion, based on the company’s forecast of $8.4 billion to $8.9 billion.

Breaking that down, handset chip sales rose 42% to $5.98 billion from a year ago, while the Street expected $5.53 billion. Meanwhile, other segments fell short: RF front-end sales rose 7% to…

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