Qualcomm Inc., a chip maker in China said that the coronavirus outbreak is expected to hinder the market growth of mobile phone industry, along with potential impact on sales and manufacturing sector.
Qualcomm is the world’s major supplier of modem chips that help mobile phones and other devices connect to wireless data networks. The comment by Qualcomm has resulted in fall of chip stock shares.
Akash Palkhiwala, chief financial officer of Qualcomm said in a conference call with investors after the release of quarterly results that the company is predicting significant unreliable impact because of coronavirus on supply chain and handset demand.
The shares of Qualcomm has fell down by 3.75% during after-hours trade.
The forecast on revenue for fiscal second year by San-Diego-based chip supplier laid largely above the Wall Street estimates, which was a sign of ease after the prolonged slowdown in global chip industry.
Palkhiwala said that the company had reduced its bottom end earning-per-share guidance by 5 percent so it can account for possible damage.
The forecast was larger than usual owing to the outbreak in China, which has resulted in hundred deaths and induced fear in people around the world.
During the conference call the Qualcomm officials persuaded to calm analyst distress over the virus reminding that the 5G markets this year are likely to be in Japan, South Korea, and United States so the company can potentially sustain disruption.
The company has earned 99 percent per share during its first quarter, exceeding average estimate of 85 percent by analysts. Revenue surged 5% to reach $5.08 billion, surpassing estimates of $4.83 billion by analysts.