Qualcomm slumps as weak smartphone chip sales overshadow data-center momentum

Qualcomm shares fell about 9 per cent in premarket trading after smartphone chip sales came in below analysts’ estimates. Investors are concerned that weakness in its main handset business could outweigh progress in data-centre and automotive chips, leaving newer growth areas unable to lift near-term earnings.

Revenue from Qualcomm’s handset division fell 26 per cent to US$5.14 billion, while chip segment sales declined 8 per cent to US$9.02 billion. If the share-price drop holds, the company could lose about US$17.5 billion in market value; at least eight brokerages cut their price targets after the results. Chief executive Cristiano Amon said Qualcomm had prepared early for memory shortages and that Android demand had improved, but higher costs and the winding down of Apple-related revenue remain pressures.