Qualcomm Inc. gave a more positive outlook than analysts expected, Sparking optimism that the Chinese smartphone market is showing signs of life.
Sales want to be $ 4.8 billion to $ 5.6 billion in the third quarter, the San Diego-based company said Wednesday in a statement. Analysts' average revenue of $ 5.45 billion, according to data compiled by Bloomberg.
The San Diego-based company is the largest maker of smart phones, making its results a key indicator of the health sector.
Qualcomm chips are not used as much by Apple Inc. for iPhones, but it's the biggest supplier to China's largest smartphone makers. This is a recent report on weaker component demand.
Qualcomm executives said in an interview that China's smartphone market is starting to improve. A construction of unused components, said Chief Financial Officer George Davis.
The company's shares rose 1
second quarter was 80 cents a share, excluding certain items. Adjusted revenue was $ 5.2 billion. Analysts had predicted adjusted earnings of $ 5.19 billion.
"China's coming from a deep bottom and getting a little bit better," Mike Walkley, an analyst for Canaccord Genuity Inc., said ahead of the results
While Qualcomm still supplies some chips to Apple, a legal dispute has started between the two companies and the iPhone maker has started using chips from other suppliers.
Qualcomm said on Wednesday it experienced a large decline in orders for modems from one customer. Qualcomm has been plagued by endless legal battles, government fines, a waning smartphone market, customers that do not pay and a failed hostile takeover bid by rival Broadcom Ltd.
Earlier on Wednesday, the stock touched its lowest intraday level since early 2016.
One of the cornerstones of the company's plan for earnings growth is its acquisition of NXP Semiconductors NV. The deal, the biggest one Qualcomm has ever attempted, which is announced in 2016 and is still waiting for regulatory approval in China.
The company is still confident it can not close the transaction ahead of a July 25 deadline. While trade tension between the U.S. said Steve Mollenkopf, Chief Executive Officer,
"We are clearly not immune to the difficult environment that exists between the countries ., "He said. "From a timing perspective, this is not the best time to take the temperature."