Published: Fri, April 21, 2017
Science | By Hubert Green

Qualcomm Waiting to See If Apple Suppliers Hold Back Royalties

Qualcomm Waiting to See If Apple Suppliers Hold Back Royalties

Wall Street had been expecting earnings of $1.19 per share on $5.89 billion in revenue. Analysts were expecting third-quarter EPS of $1.10 on revenues of $5.95 billion.

The quarter included a US$974 million reduction to revenue, or 48 cents per share, related to the BlackBerry arbitration decision, Qualcomm said on Wednesday.

On an adjusted basis, Qualcomm reported revenue of $5.99 billion, beating analysts' average estimate of $5.89 billion.

Earlier this month, Qualcomm extended a deadline for its $110 per share tender offer for NXP Semiconductors (NXPI) to May 2 from April 4.

Qualcomm forecast current-quarter adjusted profit of $0.90-$1.15 per share and revenue of $5.3 billion-$6.1 billion.

MSM chip shipments are expected between 180 million and 200 million, down 10% to flat year over year.

Qualcomm published second quarter financials Wednesday that topped estimates but warned that its looming legal battle with Apple could affect its outlook. QTL revenues rose to $2.2 billion on $82.6 billion in total reported device sales. So the chip maker took a bit of a risk by painting a relatively sanguine picture of royalty payments tied to its increasingly nasty dispute with Apple. "Our performance reflects continued execution of our strategy to lead the mobile industry across a broad set of technologies, including advanced LTE and 5G, and accelerate our growth opportunities beyond mobile into automotive, IoT, security and networking".

"We will continue to protect the value of our technologies, which enables today's robust mobile communications ecosystem, and invest in R&D that will drive the leading edge of mobile computing and connectivity for decades to come - focusing on areas where our technologies will have the most impact and generate the best returns", Mollenkopf said in a statement.

Among them is that some of Apple's contract manufacturers - which are the entities that license Qualcomm's patents - had stopping making royalty payments because they were no longer being reimbursed by Apple for Qualcomm royalties.

In the long run, Arcuri said Qualcomm "appears to have a strong case, and Apple's record in winning similar litigation is poor".

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