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Shares of the San Diego-based company fell 2.9% in extended trading, adding to the stock’s decline of about 18% this year amid a broader selloff in growth stocks.
The chip designer still surpassed expectations for adjusted revenue in the third quarter, driven by growth of 59% at its handset chips business.
“The weakness we see in consumer has been offset by the diversification strategy of the company and the focus on premium and high-tier handsets,” said Qualcomm Chief Executive Cristiano Amon.
Qualcomm is looking to diversify to sectors such as automotives, but its handset chip business still makes up more than half of total sales.
The company now expects smartphone sales to fall 5% this year, compared with its prior outlook for flat growth, Chief Financial Officer Akash Palkhiwala said.
Leading chipmakers including Micron Technology (NASDAQ:MU) and Texas Instruments (NASDAQ:TXN) have also warned of cooling consumer electronics demand.
Smartphone sales have come under pressure as runaway inflation, growing recession risks and repeated COVID-19 lockdowns in China force consumers to rein in spending. Global smartphone shipments will fall 3.5% this year, according to data from IDC.
The Ukraine crisis and China lockdowns have also worsened supply-chain snags and hurt demand, forcing many phone makers to cut orders for chips.
Qualcomm forecast current-quarter revenue between $11 billion and $11.8 billion, compared with analysts’ estimates of $11.87 billion, according to Refinitiv data.
It expects adjusted earnings per share of between $3 and $3.30, compared with estimates of $3.23.
Qualcomm said the mid-point of its fourth-quarter forecast included an estimated impact of an about 20 cents reduction to earnings per share due to macroeconomic headwinds and a lower global handset forecast.
Adjusted revenue for the quarter ended June 26, when analysts expected strong demand from Apple (NASDAQ:AAPL), was $10.93 billion, compared with estimates of $10.88 billion.
Separately, Qualcomm said it has extended its patent license agreement with Samsung Electronics (OTC:SSNLF) through the end of 2030. It also agreed to expand the use of Snapdragon platforms for future premium Samsung (KS:005930) Galaxy products, including Samsung Galaxy phones.
(This story corrects CEO’s name in paragraph 4)
