news/AAPL/2023.02.02/Qualcomm sees earnings below Street as smartphone market sags.txt

(Updates with additional quote, changes second paragraph, adds
detail on Apple iPhone sales)BENGALURU/OAKLAND, Calif. Feb 2 (Reuters) - Qualcomm Inc
forecast second-quarter revenue and profit  below Wall
Street estimates on Thursday as the chipmaker  grapples with the
combined toll of weak demand for smartphones and a supply glut,
a situation that is expected to persist into the first-half of
this year.Inflation and macroeconomic uncertainty have hurt consumer
electronics sales, and while Qualcomm has been somewhat buffered
by its focus on premium smartphones, analysts said even that
market has been hit.The stock, which initially rose 2.7% in after-hours trading,
fell 3%."The handset industry continues to experience reduced
demand, and we are now expecting elevated channel inventory
levels to persist at least through the first half of calendar
2023," Cristiano Amon, Qualcomm CEO told investors.To cope, he said the company would further cut spending and
streamline operations.On Wednesday, Samsung Electronics launched its latest Galaxy
S23 series smartphone which now uses 100% of Qualcomm processors
globally, but the launch comes at a tough time in the market."Discussions with mobile service providers revealed a
continued and deepening weakness in smartphone demand globally
which doesn't bode well for Qualcomm," said Maribel Lopez, tech
analyst at Lopez Research.Apple, the world's largest listed company, said iPhone sales
fell last quarter for the first time since 2020.Qualcomm has also diversified, pushing into new fast-growing
areas such as automotive. Revenue for that business in the
fiscal first quarter rose 58% on year to $456 million, although
the company expects that to be sequentially flat in the current
quarter.The chipmaker forecast current quarter revenue in the range
of $8.7 billion to $9.5 billion, compared with analysts'
estimates of $9.55 billion, according to Refinitiv data.Its fiscal first quarter revenue dropped 12% year-on-year to
$9.46 billion, below Wall Street expectation of $9.60 billion."I don't think we have hit rock bottom (for the smartphone
market) yet. We still have a rough year ahead," said IDC analyst
Nabila Popal. "Real recovery is not likely until 2024."First quarter revenue from Qualcomm's handset business,
which makes up the largest chunk of total sales, fell 18% on
year to $5.75 billion, compared to 40% growth in the previous
quarter.It expects adjusted earnings per share to be between $2.05
and $2.25, compared to analysts expectations of $2.26 per share.In the first quarter, Qualcomm reported adjusted earnings
per share of $ 2.37, which compares with the analyst consensus
of $2.34 per share, according to Refinitiv data.Qualcomm also said during the earnings call that it doesn't
expect its current licenses to export 4G, Wi-Fi and other chips
to Chinese telecom giant Huawei to be impacted by
reports that the U.S. Commerce Department has stopped granting
export licenses to Huawei."Those licenses were issued because Congress reached the
determination that they don't affect national security issues.
Those will continue for some number of years," Alex Rogers,
president of Qualcomm Technology Licensing and Global Affairs
said on the call with investors.(Reporting by Chavi Mehta in Bengaluru and Jane Lanhee Lee in
Oakland; Editing by Shailesh Kuber and Anna Driver)