Qualcomm's Quarter Seen as Very Messy

Dow Jones
07/30

1017 GMT - Qualcomm's efforts to raise prices in order to pay for data center build-out resulted in a chaotic fiscal third quarter for the semiconductor group, Bernstein analysts say. "This was a very messy quarter for Qualcomm," they say. Higher spending is eating into the company's margins, and efforts to raise prices in response won't be enough to mitigate the higher costs, they say. Qualcomm could benefit in the long term from its development into a nonhandset business, but the road there will be difficult as it faces headwinds in the smartphone industry and concern over its margin, they say. The analysts lower their price target for the stock to $165 from $235. Shares fall 5.45% premarket to $147.20.

 

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