[ad_1]
© Reuters. PHOTO FILE: A Qualcomm sign is seen at the China International Import Expo (CIIE), at the National Exhibition and Congress Center of Shanghai
By Sayanti Chakraborty and Stephen Nellis
(Reuters) – Shares of Qualcomm (NASDAQ 🙂 Inc. fell about 3% on Wednesday when investors had a first glimpse of the impact of a patent settlement agreement with Apple Inc. (NASDAQ 🙂 .
The title has kept most of the gains of more than 50% in recent weeks, reflecting investor relief thanks to an agreement between the mobile technology companies, but Qualcomm's forecasts suggested that the fees Apple's license would not stimulate much revenue.
Qualcomm will book a one-time payment of $ 4.5 billion to $ 4.7 billion in the third fiscal quarter following the settlement, while Apple catches up royalties that the iPhone maker has not acquitted while he was in judicial conflict.
Excluding this payment, Qualcomm estimated its revenue at $ 4.7 billion to $ 5.5 billion, with a midpoint slightly lower than the $ 5.29 billion expected by badysts, according to Refinitiv's IBES data.
"We are planning a break before the launch of 5G," said Cristiano Amon, Qualcomm's component manager, during a conference call with investors, evoking the next generation of mobile networks that will be deployed over the next five years. this year and next year.
The settlement, which includes a six-year patent license and a chip supply contract, is expected to generate an additional profit of $ 2 per share, Qualcomm said. Financial details were not disclosed, but the deal should help Qualcomm regain the pre-eminent position on the mobile chip that it held in the early 2010s.
Qualcomm estimated the turnover of its licensing business between $ 1.23 billion and $ 1.33 billion in the third quarter, with a midpoint slightly higher than consensus consensus forecast of $ 1.22 billion, according to Qualcomm. the Refinitiv data.
License revenue includes royalties from the sale of Apple products. Apple said Tuesday that its gross margin guidance, which was virtually unchanged from previous quarters, included the Qualcomm settlement. Taken together, both disclosures suggest that the patent licensing agreement had little financial impact in the short term.
Qualcomm executives said that a darker smartphone market forecast was offsetting the addition of Apple's license revenue. Stacy Rasgon, an badyst at Bernstein, said the Apple settlement was up to expectations, but the revenue outlook was disappointing.
"It tells me that Apple does not give them a lot, or that the main market is horrible, or maybe a bit of both," Rasgon said.
But shareholders have welcomed the Apple deal.
"I am delighted that Apple is back in the fold," said Hal Eddins, chief economist at Capital Investment Counsel, which owns Apple and Qualcomm shares. "I think they've both done well and I'm very impressed (Apple's general manager, Tim) that Cook has agreed."
Shares plunged 2.7% to $ 84.00 after trading. Prior to closing, Qualcomm's shares had increased by more than 50% since the company announced its settlement with Apple on April 16.
Qualcomm remains in litigation on a license with Huawei Technologies Co Ltd, but the Chinese company has made interim payments as negotiations continue. Qualcomm solved a dispute with Samsung Electronics (KS 🙂 Co Ltd last year.
"We believe that the Apple resolution enhances our ability to solve problems with Huawei," said Alex Rogers, head of patent licensing at Qualcomm, during a conference call with investors.
Qualcomm is awaiting the decision of a federal judge in a lawsuit filed by the US Federal Trade Commission alleging antitrust violations that reflect Apple's claims. The result remains uncertain after Apple, the main source of witnesses in the case, dismissed its own lawsuits.
Net earnings attributable to Qualcomm reached $ 663 million, or 55 cents per share, as of March 31, compared with $ 330 million, or 22 cents a share, a year ago.
Revenues dropped to $ 4.88 billion, but exceeded badysts' estimates of $ 4.80 billion.
[ad_2]
Source link
