Qualcomm reported fiscal third-quarter net income of $2 billion, or $1.87 per diluted share, on Wednesday, down 25% from $2.67 billion, or $2.43 per diluted share, in the same period a year earlier.
Revenue fell 4% to $9.95 billion
Qualcomm attributed the earnings pressure to industrywide cost inflation spanning the chip manufacturing supply chain — from wafer fabrication and assembly through advanced packaging and memory, the company said. Handset chip revenue, Qualcomm’s largest segment, dropped 20% year over year to $5.1 billion. Qualcomm stock fell 7.6% in after-hours trading.
Qualcomm President and CEO Cristiano Amon said the company plans to raise chip prices across the board beginning September 1 to offset the higher input costs. “Cost went up, prices are going to go up,” Amon told CNBC. The company said it expects the pricing changes to benefit gross margins over time as they gradually take effect. Amon also attributed part of the handset weakness to shifting consumer preferences.