The shares of QUALCOMM, Inc. (NASDAQ:QCOM) fell in excess of 9 percent after the chipmaker announced its first quarter 2015 financial results. The primary concern of investors was lower fiscal 2015 revenue forecast and ailing new chip from the company. At the same time, the chipmaker said its latest Snapdragon mobile chip has lost one of the major customers of the company amid performance issues.
Last month, there were some reports suggesting that Samsung Electronics Co Ltd (KRX:005930) would use its own processors for the latest model of its flagship smartphone Samsung Galaxy S after the latest processor from QUALCOMM, Inc. (NASDAQ:QCOM) didn’t pass the quality tests. Not just this, the chipmaker company said that it is having troubles with another of its chips, which might even affect its competitiveness in the Chinese market.
Stacy Rasgon, Bernstein analyst, said, “Qualcomm has a lot of market share but they have some customers with scale to do their own silicon, and it looks like that’s happening. This may be a trend.” While talking about the same QUALCOMM said that, some minor technical problems with one of its chipsets have opened the market for its smaller rivals.
At the same time, the company said that is has resolved one of the key issues with the Chinese authorities over a license. While talking about the overall performance of the chip company, Steve Mollenkopf, CEO of QUALCOMM, Inc. (NASDAQ:QCOM) , said,
“We delivered a strong quarter, achieving record quarterly revenues and Non-GAAP operating income, and we also are very pleased to have resolved our previously disclosed dispute with a licensee in China.”
The chip designer company announced its first quarter 2015 financial results with net revenues of $7.1 billion and net income of $2.0 billion for the quarter. However, considering the heightened competition in China, QUALCOMM, Inc. (NASDAQ:QCOM) lowered its revenue expectations between $26.0 billion to $28.0 billion along with lower GAAP diluted EPS of $4.04 to $4.34.
Mollenkopf further said, “Looking ahead, we have lowered our revenue outlook for our semiconductor business for the second half of the fiscal year and lowered our EPS expectations. These changes reflect our revised expectations related to OEM mix, salesto a large customer and heightened competition in China.”
This article has been written by Prakash Pandey.
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