Shares of Qualcomm Incorporated (NASDAQ: QCOM) experienced a notable drop during Thursday's trading session in response to the company's first-quarter financial results and revenue projection for the subsequent quarter that fell below market forecasts. The decline reflects investor wariness despite the quarterly earnings surpassing consensus estimates.
For the first quarter, Qualcomm reported adjusted earnings per share (EPS) of $3.50, outperforming the analyst consensus of $3.40. The company’s revenue for the period reached $12.25 billion, which also exceeded expectations pegged at $12.18 billion. The Qualcomm CDMA Technologies segment was a key driver, generating approximately $10.47 billion in revenue, while the Qualcomm Technology Licensing segment contributed an additional $1.79 billion during the quarter.
Operating income was recorded at $3.37 billion, alongside net income of $3.00 billion. On a Generally Accepted Accounting Principles (GAAP) basis, diluted EPS stood at $2.78. Furthermore, Qualcomm concluded the quarter with $7.21 billion in cash and liquid assets, underpinning its liquidity position.
Looking ahead, Qualcomm’s outlook for the second quarter projects adjusted EPS ranging from $2.45 to $2.65, which falls short of the consensus estimate of $2.88. The revenue guidance anticipates totals between $10.20 billion and $11.00 billion, compared to the anticipated $11.10 billion. This guidance revision has contributed to the market's negative reaction to the stock.
In response to the earnings announcement, several analysts updated their recommendations for Qualcomm’s shares. Mizuho analyst Vijay Rakesh maintained a Neutral stance but reduced the price target from $160 to $140. Meanwhile, Rosenblatt analyst Kevin Cassidy retained a Buy rating, lowering the price target from $225 to $190. These adjustments indicate a tempered outlook on the stock's near-term price appreciation.
From a technical standpoint, Qualcomm's shares are trading at a significant discount relative to key moving averages. The price is approximately 15.3% below the 20-day simple moving average and 20.7% under the 100-day simple moving average, signaling weak short-to-medium-term momentum. Over the previous 12 months, the stock has declined around 15.34%, and its current price hovers closer to the 52-week low than to its high mark.
Technical indicators further emphasize this cautionary tone. The Relative Strength Index (RSI) stands near 30.35, reflecting a neutral position but nearing oversold territory. Additionally, the Moving Average Convergence Divergence (MACD) indicator is situated below its signal line, suggesting prevailing bearish momentum. The combination of these signals points to uncertainty and potential pressure on Qualcomm’s stock price in the near term.
The Benzinga Edge ranking system offers additional insights into Qualcomm's metrics versus the broader market. The stock scored weakly on Value (21.45), indicating it trades at a significant premium relative to peers. Its Quality score was neutral at 63.14, reflecting a generally healthy balance sheet. Momentum was a weak point with a score of 18.65, consistent with recent underperformance relative to market benchmarks.
In summary, Qualcomm's latest quarterly performance showed solid earnings and revenue results that beat market consensus, underscoring operational strength. However, the cautious outlook for the second quarter, combined with technical indicators and adjusted analyst price targets, contributed to investor uncertainty and a notable share price decline. The stock trades under pressure, and current metrics suggest potential challenges in regaining upward momentum amid market sensitivity to guidance revisions.