Copyright Reuters
Summary Companies Qualcomm forecasts Q1 sales and profit above Wall Street expectations New U.S. tax legislation results in $5.7 billion noncash charge in fourth quarter Q4 sales and profit top market estimates as smartphone demand recovers SAN FRANCISCO, Nov 5 (Reuters) - Qualcomm (QCOM.O), opens new tab on Wednesday forecast fiscal first-quarter sales and profit above Wall Street expectations, powered by a renewal of end-market demand in the smartphone industry. For the current fiscal first quarter, Qualcomm said it expects sales and adjusted profit with a midpoint of $12.2 billion and $3.40 per share, above analyst estimates of $11.62 billion and $3.31 per share, according to LSEG data. Sign up here. For the fiscal fourth quarter ended September 28, Qualcomm reported sales and adjusted profit of $11.27 billion and $3 per share, compared with Wall Street expectations of $10.79 billion and adjusted profit of $2.88 per share. Qualcomm is among the world's biggest suppliers of the modem chips that connect smartphones to wireless data networks but has been expanding into other fields such as laptops and automobiles. It is a longtime supplier to Apple (AAPL.O), opens new tab, though Qualcomm has told investors since 2021 that it expects Apple to eventually transition to its own modems. In an interview, Qualcomm CEO Cristiano Amon told Reuters that the company's results and forecast were driven by a wave of consumers upgrading midpriced smartphones to more expensive devices to handle AI apps, with the market beginning to divide sharply between low-end devices and the pricier premium devices Qualcomm has historically relied on to drive profit. "You don't have anything in the middle," Amon said. "And that's kind of a global phenomenon that's happening in China, that's happening in India. We continue to see an expansion of the premium tier." Qualcomm shares have risen about 12.5% this year, below the 20.9% gain of the Nasdaq Composite Index (.IXIC), opens new tab, as investors have worried about the impact of tariffs on the company's smartphone chip business and whether it was positioned to profit from the artificial intelligence boom. Last month, however, Qualcomm unveiled a new series of AI chips for data centers that it said will roll out next year, sending its shares up 20% in a single day. Qualcomm said on Wednesday that the new U.S. tax legislation resulted in a $5.7 billion noncash charge, or about $5.29 per share, in its fiscal fourth quarter and that it expects to be subject to the U.S. corporate alternative minimum tax in its next fiscal year. The company said the move did not affect its adjusted results. Reporting by Stephen Nellis in San Francisco and Arsheeya Bajwa in New Delhi; Editing by Matthew Lewis
