(Bloomberg) — Qualcomm Inc., the biggest maker of chips that run smartphones, fell in late trading after reporting lackluster growth in that market, fueling concerns that tariffs will take a toll on the industry.
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Phone-related sales rose 7% to $6.33 billion in the fiscal third quarter, which ended June 29, Qualcomm said in a statement Wednesday. The average analyst estimate was $6.48 billion, according to data compiled by Bloomberg.
The results add to broader fears that a chip growth resurgence is under threat. In recent days, chipmakers such as Texas Instruments Inc. and Intel Corp. gave cautious outlooks, triggering concern that a sales rebound will be short-lived.
Qualcomm shares fell about 6% in late trading following Wednesday’s announcement. Heading into the earnings report, the chipmaker’s stock had already lagged a general rally by semiconductor stocks this year.
Revenue in the quarter ending in September will be $10.3 billion to $11.1 billion, the San Diego-based company said. That compares with an average analyst estimates of $10.6 billion.
Qualcomm’s third-quarter profit was $2.77 a share, excluding some items. Revenue gained 10% to $10.37 billion. Wall Street had predicted a profit of $2.72 a share and sales of $10.33 billion.
Revenue from chips used in vehicles rose 21% to $984 million. Connected-device semiconductor sales, meanwhile, climbed 24% to $1.68 billion.
Qualcomm supplies processors and modems that are the main components of the world’s most advanced smartphones. The chipmaker also collects fees calculated as a percentage of the cost of a handset, regardless of whether the phone maker uses its chips.
An ongoing challenge for Qualcomm is Apple Inc.’s decision to make its own modem chips for the iPhone. Qualcomm has told investors to expect its supplies in the device to be fully replaced, but delays in the development of an Apple part has lengthened this transition. Apple currently has an in-house modem in one of its iPhones, the low-end 16e.
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