Wireless chipset major Qualcomm is expecting a significant drop – 15 percent to 27 percent — in revenue in the first quarter of fiscal 2016 to $5.2 billion to $6 billion against $7.1 billion in Q1 FY 2015.

This is primarily due to drop in MSM chip shipments to 225 million – 245 million from 270 million. The San Diego, US based company is also forecasting up to 11 percent dip in sales of devices with Qualcomm chips to $50 billion – $58 billion in the first quarter from $56.4 billion.

The company is not giving guidance on revenue for the full year.

Globally 3G 4G device sales are estimated to grow in single digits in fiscal 2016 from $271 billion – $280 billion in fiscal 2015.

Qualcomm posted 18 percent drop in revenue to $5.5 billion in Q4 fiscal 2015 and 5 percent dip in revenue to $25.3 billion in fiscal 2015.

Net income of Qualcomm declined 44 percent to $1.1 billion and fell 34 percent to $5.3 billion.

“Our fiscal fourth quarter revenues and EPS were at the high end of our expectations, with stronger-than expected MSM chipset shipments offsetting slower than expected progress concluding new license agreements in China,” said Steve Mollenkopf, CEO of Qualcomm.

The company noted that its performance was affected by $975 million charge due to the probe by the China National Development and Reform Commission (NDRC); $142 million of charges related to one of its display businesses; $190 million of charges due to restructuring.

Qualcomm said it is on track to achieve $1.1 billion run rate reduction exiting FY 2016 and at least $600 million in savings in FY 2016. The chip major is also reviewing its business plans.

Baburajan K
[email protected]