Qualcomm Lowers Current Quarter Forecast
Qualcomm reduced its outlook for its semiconductior business for the second half of fiscal 2015, saying the loss of a key customer and delays in product launches by some smartphone makers would hurt sales of its flagship Snapdragon chips. Earlier this year, Samsung Electronics opted to use an internally developed processor for its new Galaxy S6 smartphone and Note rather than Qualcomm's latest Snapdragon mobile chip.
The company also cut its full-year revenue and profit forecast for the second time, citing lower sales of Snapdragon chips.
Qualcomm's licensing business has also had its fair share of problems. The company agreed in February to pay a fine of $975 million to settle a long-standing antitrust probe by the Chinese government.
Much of the decline in Qualcomm's profit for the second quarter was due to the settlement, which also requires the company to lower its royalty rates on patents used in China.
The company forecast an adjusted profit of 85 cents-$1 per share and revenue of $5.4 billion-$6.2 billion for the third quarter.
Excluding items, the company earned $1.40 per share. Revenue rose 8.3 percent to $6.89 billion.
"We are pleased with our second quarter results, with record licensing revenues and earnings driven by all-time high 3G/4G device shipments reported by our licensees. We continue to see robust global demand for 3G/4G devices, including in China where our licensing business is now better positioned to participate in the rapidly accelerating adoption of our 3G/4G technology," said Steve Mollenkopf, CEO of Qualcomm Incorporated. "While we remain confident in the significant growth opportunities ahead, we are reducing our QCT outlook for fiscal 2015, primarily due to the increased impact of customer share
shifts within the premium tier and a decline in our share at a large customer. In addition to our ongoing expense management initiatives, we have initiated a comprehensive review of our cost structure to identify opportunities to improve operating margins while at the same time extending our technology and product
leadership positions."