Qualcomm Outlook Fails to Meet Lofty Investor Expectations

Core Viewpoint - Qualcomm Inc. provided a positive sales and profit forecast, exceeding Wall Street estimates, yet the stock price fell by up to 3% the following day, reflecting investor disappointment despite strong performance indicators [1][2]. Group 1: Financial Performance - Qualcomm's revenue for the fiscal first quarter is projected to be approximately $12.2 billion, surpassing analysts' expectations of $11.6 billion [6]. - The company's earnings are expected to be around $3.40 per share, excluding certain items, which also exceeds the estimated $3.26 per share [6]. - In the fourth quarter ending September 28, Qualcomm reported a profit of $3 per share, excluding some items, which was above the analyst estimate of $2.88 per share [8]. - Revenue for the fourth quarter rose by 10% to $11.3 billion, exceeding the projected $10.8 billion [8]. Group 2: Market Dynamics and Strategic Shifts - Qualcomm's outlook indicates strong demand in the high-end Android phone market, which is a significant revenue source for the company [7]. - The company is actively working to reduce its dependence on the smartphone market by diversifying into chips for cars, personal computers, and data centers, with early signs of success in this transformation [7]. - CEO Cristiano Amon noted that the recent stock resurgence may have set high expectations, leading to investor disappointment despite the positive forecast [4][5]. Group 3: Tax Implications - Qualcomm experienced a $5.7 billion writedown due to a US tax change, contributing to a net loss of $3.12 billion [5]. - The company plans to adopt an alternative minimum tax with a stable rate of 13% to 14%, which is expected to be beneficial in the long run [6].