Qualcomm stock fell Thursday even though the wireless-chip maker beat Wall Street's expectations for the December quarter and guided higher for the current period.
The San Diego-based company late Wednesday said it earned an adjusted $3.23 a share on sales of $10.7 billion in its fiscal first quarter ended Dec. 26. Analysts had expected Qualcomm earnings of $3.01 a share on sales of $10.44 billion, according to FactSet. On a year-over-year basis, Qualcomm earnings rose 49% while sales climbed 30%.
For the current quarter, Qualcomm forecast adjusted earnings of $2.90 a share on sales of $10.6 billion. That's based on the midpoint of its outlook. Wall Street had predicted earnings of $2.51 a share on sales of $9.66 billion in the March quarter, FactSet said.
"Our record quarterly results reflect the strong demand for our products and technologies," Chief Executive Cristiano Amon said in a news release. "We are at the beginning of one of the largest opportunities in our history, with our addressable market expanding by more than seven times to approximately $700 billion in the next decade. Our one technology roadmap positions us as the partner of choice for both mobile and the connected intelligent edge."
Qualcomm Stock Sinks After Report
While Qualcomm is starting to diversify its business away from smartphones, handsets still accounted for 68% of its wireless-chip business in the December quarter.
On the stock market today, Qualcomm stock dropped 4.8% to close at 179.10.
During the regular session Wednesday, Qualcomm stock jumped 6.3% to 188.20.
At least 10 Wall Street analysts raised their price targets on Qualcomm stock after the earnings report.
Qualcomm Stock A Recent Breakout
On Nov. 5, Qualcomm stock touched a buy point of 168.04 out of a 40-week consolidation pattern, according to IBD MarketSmith charts. It decisively broke out on Nov. 15. Qualcomm stock hit a record high of 193.58 on Jan. 5 before retreating during the stock market correction.
Qualcomm was one of seven semiconductor companies with earnings reports out Wednesday. The others included FormFactor, Kulicke & Soffa Industries, MaxLinear, Qorvo, Silicon Laboratories and SiTime.
Chipmakers MaxLinear, Qorvo, Silicon Labs and SiTime delivered beat-and-raise reports. Semiconductor equipment suppliers FormFactor and Kulicke tops views for the December quarter but offered mixed guidance.
Qualcomm stock is tied for first place in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It shares an IBD Composite Rating of 98 out of 99 with several other semiconductor stocks including MaxLinear. The fabless semiconductor group ranks No. 38 out of 197 industry groups that IBD tracks.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
