Wall Street sees little respite to Qualcomm's smartphone gloom - Yahoo Finance

(Reuters) - Sales astatine Qualcomm Inc are slowing arsenic the smartphone marketplace heads for its worst contraction successful years, and Wall Street analysts don't expect that to crook astir anytime soon.

At slightest 14 brokerages lowered their terms targets connected the largest shaper of smartphone chips connected Thursday aft it gave a forecast $2 cardinal beneath marketplace estimates and said it had other inventory that could instrumentality fractional a twelvemonth to clear.

Shares, which person already mislaid much than a 3rd of their worth truthful acold successful 2022, were down astir 8% earlier the bell.

"We judge a anemic market, and adjacent a imaginable inventory correction was apt not wholly unexpected, though the magnitude is astir apt worse than what immoderate mightiness person had successful mind," analysts astatine Bernstein wrote successful a note.

The company's dour holiday-quarter outlook underscores the accelerated diminution successful the smartphone market, arsenic strict COVID-19 restrictions sap request successful apical marketplace China and a planetary surge successful ostentation weighs connected user spending elsewhere.

The chipmaker present expects a low-double-digit percent diminution successful handset income volumes this year, compared with its anterior forecast for a mid-single-digit percent drop.

"Qualcomm's smartphone concern is much positioned successful the mid-range ... and the mid-range is presently the astir impacted conception successful the smartphone market," said Canalys probe expert Runar Bjørhovd.

Graphic: Qualcomm's handset conception gross maturation slips - https://graphics.reuters.com/QUALCOMM-RESULTS/lgvdkmgdapo/chart.png

"The outlook for the remainder of the twelvemonth remains pessimistic, but determination are anticipation that request volition commencement to prime up again towards the mediate of 2023," Bjørhovd added.

There are, however, immoderate agleam spots.

Qualcomm expects to person the immense bulk of 5G modem stock for the 2023 iPhone launch, up from a erstwhile presumption of 20%. Its gross from caller absorption areas specified arsenic automotive equipment, networking and computers is besides rising.

(Reporting by Chavi Mehta and Aditya Soni successful Bengaluru; editing by Milla Nissi)