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Feb 2 (Reuters) – Qualcomm Inc ( QCOM.O ) on Thursday forecast second-quarter revenue and profit below Wall Street estimates as the company grapples with weak smartphone demand and a supply glut.

Smartphone shipments fell 18.3% in the quarter ended Dec. 31, the biggest quarterly decline ever, according to data from research firm IDC, as even the holiday shopping season failed to revive consumer spending amid rising prices. IDC added that shipments hit a nine-year low of 1.21 billion units in 2022.

Weak demand for lower-end handsets has also started to hit premium devices, driving companies like Qualcomm high prices for their chips.

The oversupply in the smartphone market, which was one of the first to show a softening in demand after a spike in growth caused by the pandemic, is an additional blow.

Smartphone chip companies including Apple ( AAPL.O ) supplier Qorvo ( QRVO.O ) forecast lower earnings as its customers continued to clear bloated inventories. Analysts at Cowen expect smartphone shipments to fall 4% this year as demand in China takes some time to recover from the massive COVID-19 outbreak.

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Revenue from its phone business, which accounts for the largest share of total sales, fell 18%, compared with 40% growth in the previous quarter.

The chipmaker expects revenue in the range of $8.7 billion to $9.5 billion in the current quarter, compared with analysts’ estimates of $9.55 billion, according to data from Refinitiv.

It expects adjusted earnings per share to be between $2.05 and $2.25, compared with analysts’ expectations of $2.26.

Reporting by Chavi Mehta in Bengaluru and Jane Lanhi Lee in Auckland; Editing by Shailesh Kuberi

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