Qualcomm sees quarterly smartphone sales down 30% from prior estimate

The coronavirus will have a significant impact on Qualcomm's smartphone sales this quarter, with units down as much as 30% from prior estimates, CEO Steve Mollenkopf said in an interview on Wednesday.

Driving the news: Mollenkopf spoke right after Qualcomm posted March earnings and revenue ahead of expectations, with its current quarter financial outlook roughly in line with estimates.

Why it matters: Qualcomm has been gearing up for a big year thanks to the shift to 5G, which should help it gain market share from rivals and earn more revenue per phone than it did for 4G devices.

• That estimate is based on the assumption that business in China continues to recover and that sales elsewhere begin to recover around June.
• Mollenkopf said the company expects between 175 million and 225 million 5G phones to be sold this year, in line with its previous forecast.
• Qualcomm didn't give a full-year forecast for total smartphone shipments, which many analysts believe will take a big hit due to the coronavirus. "We clearly have had impact," Mollenkopf told Axios. "We are forecasting impact."

Between the lines: The company reported per-share earnings for the quarter that ended March ahead of expectations, while its outlook for the current quarter, which ends in June, was roughly in line with analysts' expectations.

• For the quarter ending in March, the company reported per-share earnings of 88 cents on revenue of $5.2 billion. Analysts were looking for per-share earnings of around 76 cents on revenue of $5.02 billion, per Yahoo Finance.
• For the quarter that ends in June, Qualcomm sees per-share earnings of between 60 cents and 80 cents on revenue of $4.4 billion to $5.2 billion. Analysts were forecasting earnings of 75 cents per share, on average, with revenue of about $4.89 billion.
• Mollenkopf said that China continues to move fast toward 5G, as does the U.S., while momentum has slowed in Europe.

• "The whole episode has shown us 5G is even more important," Mollenkopf told Axios, noting that next-generation cellular technology can play a key role in areas like telemedicine and distance learning.

Mollenkopf said that the company is cutting costs where prudent, but will remain focused on taking advantage of strong 5G demand.

• "We continue to add people in key areas," he said on a conference call with analysts.
• The company also signed key licensing deals during the quarter with Oppo and Vivo, two big Chinese smartphone brands.

Qualcomm shares rose in after-hours trading, with the stock recently trading at $81.50, up more than 3%.

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