Qualcomm expects fourth-quarter earnings per share of $2.05 to $2.25
Key Facts
Qualcomm announced its fiscal fourth-quarter 2026 outlook in July, estimating adjusted earnings of $2.05 to $2.25 per share, compared with analysts’ average estimate of $2.36, according to Reuters. The company estimated revenue of $9.7 billion to $10.5 billion, versus estimates of $10.02 billion. The outlook came as revenue tied to Apple was declining more rapidly; it was not new guidance on October 30. Reuters said Qualcomm shares fell more than 4% in extended trading on July 29, while Apple shares were steady. Qualcomm later announced on October 22 that its fourth-quarter and fiscal 2026 results would be released after the market close on November 4.
Qualcomm’s declining share of components for the next iPhone is one source of pressure on its handset business. The company said supply constraints would reduce its share to well below its previous estimate of 20%. In the third quarter of fiscal 2026, handset chip revenue fell 20% year over year to $5.086 billion, according to the company’s filing with the U.S. Securities and Exchange Commission. Reuters reported that handset unit revenue was $5.09 billion, above analysts’ estimate of $4.96 billion despite the annual decline. In the same period, automotive revenue rose 61% to $1.588 billion, while Internet of Things revenue grew 9% to $1.83 billion.
Qualcomm’s total revenue in the third quarter was $9.947 billion, down 4% year over year, while adjusted earnings per share fell 20% to $2.21, according to the filing. The company attributed cost pressure to broad increases across chip manufacturing, assembly, testing, advanced packaging, memory and other materials. The chief executive said the company planned to raise prices starting September 1 to address higher supply-chain costs. He added that the temporary gap between costs and prices was weighing temporarily on gross margin. These pressures make the revenue and margin trajectory in the handset segment among the factors behind the cautious fourth-quarter outlook.
The company is seeking to expand revenue beyond the handset market to soften the impact of the decline tied to Apple. The chief financial officer said growth in non-handset businesses in fiscal 2027 was expected to fully offset Apple-related revenue in fiscal 2026. The chief executive said growth in non-handset revenue, including data centers, accelerated from 24% in fiscal 2026 to more than 60% in 2027, according to the company’s filing. Qualcomm set a data-center revenue target of $5 billion in fiscal 2027, rising to $15 billion by 2029. It also said it had begun production of custom chips under two agreements with hyperscalers, with revenue from the agreements expected to begin in the quarter ending in December.
In the latest closing data provided, Qualcomm shares closed at $185.41 on October 29, compared with $182.97 in the previous session, according to EL7 data. That close does not reflect the share move Reuters reported after the July announcement; the agency then recorded a decline of more than 4% in extended trading. Apple shares closed at $348.91 on October 29, then at $347.5 on October 30, according to EL7 data. On October 30, the Nasdaq fell to its lowest level in about three months amid concerns about Amazon’s AI spending and Intel’s warning about cash burn. Reuters said those developments triggered a global sell-off in chip stocks, while the Associated Press linked the decline in technology shares to concerns that AI investment fever was driving prices higher.
Markets are awaiting Qualcomm’s fourth-quarter and fiscal 2026 results after the market close on November 4, the date the company announced on October 22. The results will provide actual figures for comparison with the revenue and earnings outlook it issued in July. The company’s stated backdrop includes the trajectory of input costs and gradual price increases, alongside continuing supply constraints on components for the next iPhone. Qualcomm is also counting on growth in its data-center business and the two custom-chip agreements with hyperscalers, with revenue from both expected to begin in the December quarter. The company’s data-center target extends to fiscal 2027 and then 2029, while it aims to offset Apple-related revenue in fiscal 2026 during the following fiscal year.