(Reuters) -Qualcomm on Wednesday forecast third-quarter revenue just shy of Wall Street estimates, expecting tepid demand for its smartphone chips as the CEO expressed concern about the macroeconomic environment and global trade.
The company’s chips are currently excluded from U.S. President Donald Trump’s steep tariffs but slower economic growth had hit demand.
For its current fiscal quarter, the company expects a sales range with a midpoint of $10.3 billion, below analysts’ average estimates of sales of $10.35 billion, according to data compiled by LSEG.
San Diego, California-based Qualcomm is the world’s biggest supplier of modem chips that connect smartphones to wireless data networks.
It expects adjusted profits between $2.60 per share and $2.80 per share. The midpoint is above estimates of $2.67 per share.
Even though Qualcomm’s chips so far have been excluded from Trump’s steep tariffs, escalating Sino-U.S. trade tensions have cast a shadow over the company’s revenue from its biggest market. China accounted for about 46% of its total sales in its last fiscal year.
Qualcomm categorizes geographical revenue on the basis of its customer’s headquarters.
“As we navigate the current macroeconomic and trade environment, we remain focused on the critical factors we can control – our leading technology roadmap, best-in-class product
portfolio, strong customer relationships and operational efficiencies,” CEO Cristiano Amon said in a statement.
While the U.S. government has granted smartphones and chips special exclusions from steep tariffs, Trump has warned of sector-specific levies to come for semiconductors.
Global smartphone shipments rose 1.5% in the first three months of the year, according to data from research firm IDC, with major Qualcomm customer Apple front-loading supply to sidestep potential tariffs.
Qualcomm reported sales of $10.98 billion for its fiscal second quarter ended March 30, beating estimates of $10.66 billion.
(Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney in San Francisco; Editing by David Gregorio)
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