Qualcomm CEO Cristiano Amon delivers a keynote speech at Computex in Taipei, Taiwan June 1, 2026.
Ann Wang | Reuters
Qualcomm reported fiscal third-quarter earnings on Wednesday that were in line with analyst expectations, but it provided light guidance for current-quarter earnings on in-line revenue, blaming the ongoing supply crunch for computer parts, especially memory.
Qualcomm is taking concrete measures to expand its margins going forward, CEO Cristiano Amon said in an interview, including raising prices across the board starting on September 1 for the company’s chips, most of which currently go to smartphone makers, and looking for other ways to streamline the company’s supply chain.
Qualcomm shares fell in extended trading.
“Cost went up, prices are going to go up,” Amon said.
Here’s how the chipmaker did versus LSEG consensus estimates:
- EPS: $2.21, adjusted, versus $2.23 estimated
- Revenue: $9.95 billion versus $9.67 billion estimated
In the current quarter, Qualcomm said it expects adjusted earnings per share of between $2.05 to $2.25 on revenue between $9.7 billion and $10.5 billion. Analysts polled by LSEG were expecting $2.36 in adjusted earnings per share on $10.02 billion of sales.
“The semiconductor industry is experiencing a broad-based increase in input costs, across wafer fabrication, assembly, test, advanced packaging, memory and other materials,” Qualcomm said in its release, although, as management noted, “revenues continue to be healthy.”
The company’s handsets business remains the largest slice of chip sales, although Qualcomm under Amon is looking to diversify to cars, smart glasses, and robots, and is targeting non-smartphone sales to be 60% of the company’s revenues next year.
Qualcomm reported $5.1 billion in handset chip sales, which was down 20% on an annual basis, and which the company said reflected a bottoming in the China market.
Amon said that dynamics in the smartphone market had made low-end and mid-priced phones less competitive because of affordability issues. He also said that even premium Android phones, where Qualcomm is dominant, were seeing customers looking for lower prices.
“Consumer preference within the premium category is changing towards a preference to the lower end of the premium, as well to last year’s phone, because of the memory price increases,” Amon said.
“There’s also a change in gross margin because of the high supply cost that you’re all hearing about,” Amon added. “It’s a temporary, short-term thing we are addressing with price increases.”
Qualcomm’s automotive business was a bright spot. Qualcomm reported $1.59 billion in automotive sales. The company said in June that it was looking to report $10 billion in automotive revenue by 2029. It announced a chip supply deal with BMW for digital cockpit chips on Wednesday.
The company is also looking to burst into the quickly-growing market for AI data center infrastructure. Amon said the was still on track to report $5 billion in data center revenue next year. On Wednesday, Qualcomm also announced that it had completed the acquisition of Modular, a buzzy software company making programming technology for AI, and the company said it would unveil its AI software platform at a conference in August.
The company’s chips for low-power industrial uses and smart glasses are reported as internet of things revenue. The unit’s sales rose 9% on an annual basis to $1.83 billion in sales.
Net income during the period was $2 billion, down 25% from $2.66 billion in the year-ago period.
Qualcomm makes significant profit through its QTL division, which licenses its intellectual property for cellular connections and other chip technology to other companies. Qualcomm’s QTL revenue was $1.28 billion, higher than the StreetAccount estimate of $1.26 billion.
