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(Reuters) -Chipmaker Qualcomm (NASDAQ:QCOM) Inc forecast that revenue would come in $2 billion less than Wall Street analysts estimated for the current quarter due to a sharp drop in smartphone sales, and its shares sank 7% in after-hours trading.
Qualcomm also said profits would be less than expected.
Decades-high inflation, the Ukraine war, COVID-19 lockdowns in China and fears of an economic slowdown have soured demand for personal electronics as consumers abandon discretionary spending on items such as mobile phones.
That in turn led to a 12% drop in smartphone unit shipments in the third quarter ended September, according to Counterpoint Research.
Qualcomm expects a low double-digit percentage decline in handset volumes this year, compared with its prior forecast of a mid-single-digit percentage drop.
Revenue from Qualcomm’s handsets business, which makes up more than half of total sales, rose 40% in the fourth quarter, while revenue from chips that enable WiFi and Bluetooth connections fell 20%.
The company forecast current-quarter revenue in the range of $9.2 billion and $10 billion, compared with analysts’ estimates of $12.02 billion, according to Refinitiv data.
It expects adjusted earnings per share to be between $2.25 and $2.45, compared with analysts’ expectations of $3.42.
