Qualcomm Tops Q4 Estimates, but a Light EPS Guide Sends Shares Lower After Hours

QCOM reported fiscal fourth-quarter results on Wednesday that edged past Wall Street's estimates: adjusted EPS of $2.17 against $2.16 expected, and adjusted revenue of $10.44 billion, ahead of a consensus near $10.12 billion in SentiSense's earnings calendar (Reuters cited $10.11 billion). Revenue was still down 7% from a year earlier, and GAAP EPS was $1.17, according to the company's release. The stock had closed up 5.3% in the regular session, then slid about 6% in extended trading, per CNBC; Reuters put the after-hours drop at more than 4.5%.

The guidance is where the reaction came from, and it cuts two ways. Qualcomm guided first-quarter revenue to $10.4 billion to $11.2 billion, a midpoint of $10.8 billion that sits above the $10.48 billion consensus, which Reuters framed as an upbeat sales forecast driven by non-smartphone segments. Adjusted EPS guidance of $2.15 to $2.35, however, centers on $2.25, below the $2.27 analysts expected. The company's release points to broad input cost increases, memory among them, and says Qualcomm is raising product prices with the full benefit to chip gross margins expected in the second half of fiscal 2027.

The handset business remains the drag. Handset chip sales fell 26% to $5.14 billion, short of a $5.21 billion StreetAccount estimate (Visible Alpha had $5.25 billion ). Reuters tied the weakness to memory prices that climbed on AI server demand and raised device costs, citing Counterpoint data showing September-quarter smartphone shipments fell 20% to a 14-year low. CEO Cristiano Amon said Android shipments in China have bottomed, although the company expects a flat handset market in 2027.

Outside phones the picture was stronger. Automotive revenue rose 89% to $1.99 billion, beating a $1.66 billion estimate; IoT grew 4% to $1.88 billion; and licensing revenue fell 7% to $1.3 billion, in line with expectations. Data center revenue was $650 million in the quarter, and Amon reiterated a $5 billion data center target for fiscal 2027, saying "We don't have a demand issue; it's a supply issue".

What to watch: whether the price increases rebuild chip margins on the promised timeline, how quickly data center revenue scales toward the fiscal 2027 target, and whether handset sales start growing sequentially as management suggests. Reuters reported that the outlook assumes no further sales from Apple, which keeps the non-handset ramp at the center of the story.