Qualcomm has reduced its turnover forecast for the year by $1 billion, attributing its decision to a “decline in share at a large customer” and the “increased impact of customer share shifts within the premium sector”. The company has missed out on supplying Samsung chips for its latest Galaxy smartphones and has also suffered because of the strength of Apple’s iPhone. Qualcomm now expects turnover for the year of $25-27 billion, having previously forecast turnover in the range of $26-28 billion.
The news came as Qualcomm released its second quarter results, posting a net profit of $1.1 billion, down 46% year on year from $2 billion, while turnover increased 8% to $6.9 billion from $6.4 billion, For the first six months of the year, the company reported a net profit of $3 billion on turnover of $9.6 billion, which compares with a net profit of $3.8 billion on turnover of $8.8 billion for the corresponding period of last year.
Qualcomm’s CEO, Steve Mollenkopf, commented: “In addition to our ongoing expense management initiatives, we have initiated a comprehensive review of our cost structure to identify opportunities to improve operating margins while at the same time extending our technology and product leadership positions”. Referring to the chip business, he added, “We do not believe these product cycle issues represent a long-term change in QCT’s competitive positioning”, but warned that the problem may continue into next year. As a result, Qualcomm is working with an “outside expert” to review its cost structure.