Qualcomm (QCOM) earnings Q3 2020


Steven Mollenkopf, CEO of Qualcomm

Mike Blake | Reuters

Qualcomm rose more than 13% after hours on Wednesday as the company reported fiscal third-quarter earnings that beat expectations and announced a long-term patent agreement with Huawei, settling a major unanswered legal question for the company .

Here’s how it projected the Refinitiv consensus:

  • EPS: Estimated $ 0.86 (non-GAAP), vs. $ 0.71.
  • Revenue: $ 4.89 billion vs. $ 4.8 billion estimated.

However, the reported earnings are difficult to compare with analyst estimates, as the coronovirus epidemic affects global economies and makes forecasting difficult.

Revenue was flat year-over-year and diluted EPS was 8% year-over-year.

Qualcomm stands to benefit substantially from building the 5G network and issuing a strong forecast for its upcoming quarter, suggesting that 5G is starting to become an economic force. Qualcomm sells modem chips to phone manufacturers, and licenses significant patents to anyone using 5G technology.

Qualcomm said that it has signed a long-term patent agreement with Huawei, which will be a major vendor of 5G phones and network equipment. Qualcomm settled similar patent lawsuits last year with a major handset customer, Apple.

Moore Insights analyst Patrick Moorehead said, “Qualcomm has signed a long-term licensing agreement with Huawei, indicating that Qualcomm is entering a period in which long-term licensing with every major handset manufacturer for the future There are agreements. “

Qualcomm said it expected 5G handset shipments to be 15% lower year-over-year in the quarter ending in September, partly due to “customer delays in launching global 5G handsets.” Qualcomm expects non-GAAP EPS to decrease by $ 0.25 per share. Qualcomm said that it still expected between 175 million and 225 million 5G handsets in 2020.

Qualcomm’s views on the 5G handset schedule have shifted since the last quarter, when Qualcomm said that its customers, including Apple, were likely to release 5G phones on the previous schedule.

Qualcomm said it expected to report between $ 1.05 and $ 1.25 in non-GAAP Revenue would be between $ 5.5 billion to $ 6.3 billion in the quarter ended September, excluding diluted EPS, and certain items.

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