Qualcomm cites coronavirus uncertainty in lowered guidance

During a conference call Wednesday that was mostly about Qualcomm’s success in 5G, the company said it was reducing the low end of its guidance for its second fiscal quarter due to “significant uncertainty” around the impact from the coronavirus on handset demand and supply chain.

For the second fiscal quarter, Qualcomm is estimating revenues to be in the range of $4.9 billion to $5.7 billion and non-GAAP earnings per share of 80 cents to 95 cents.

“Based on the information we have at this time, we are widening and reducing the low end of our guidance range. We remain in active contact with our employees, customers and suppliers as we continue to monitor the situation,” said CFO Akash Palkhiwala during the conference call with analysts.

The viral outbreak of acute respiratory disease, called 2019-nCoV, was first reported in Wuhan, China, on December 31. According to the World Health Organization (WHO), there were 28,060 confirmed cases in China as of today, and 564 deaths.

FierceElectronics previously reported on the impact coronavirus is having on the electronics market, including smartphones. The GSMA earlier this week said the virus would have a “minimal impact” on MWC 2020 in Barcelona, Spain, the trade show that attracts attendees from all over the world and usually a large contingent from China.

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During his prepared remarks on Wednesday’s call, Qualcomm CEO Steve Mollenkopf acknowledged the impact of the virus. “Our thoughts are with the many Qualcomm employees in China, our customers and suppliers, their families, as well as those who are impacted by this unprecedented situation,” he said.

For its latest fiscal quarter, Qualcomm reported revenue of $5.08 billion, an increase of 5% over the year-ago quarter and higher than Wall Street expectations of $4.84 billion.

Mollenkopf said more than 345 operators in nearly 120 countries are investing in 5G, including 45 operators in over 20 countries that have launched commercial 5G services, spanning both the sub-6 and millimeter wave spectrum. Looking forward, the company continues to expect millimeter wave to be deployed in all regions.

The company now has more than 80 5G license agreements, up from 75 last November, and more than 45 OEMs have announced and/or launched commercial 5G devices.