Qualcomm reports loss in the middle of Apple's fight



Qualcomm Inc. suffered a loss in its last quarter, as sales at the unit of the company that develops mobile modem technology remained stable and its licensing business continued to be affected by a continuing struggle with Apple Inc.

Qualcomm, based in San Diego, on Wednesday posted a loss of $ 493 million, or 35 cents per share, compared to a gain of $ 168 million, 11 cents per share, in the same period last year. Qualcomm also had problems with expenses in the most recent quarter, as total costs increased 16% to $ 6.46 billion.

On an adjusted basis, Qualcomm reported earnings of 90 cents per share, surpbading the 83 cents per share expected by badysts surveyed by FactSet.

Qualcomm recorded $ 5.8 billion in revenue for the quarter, 2% less than the previous year. Analysts expected $ 5.53 billion.

The company recorded $ 4.65 billion in sales in its segment that creates sets of chips used in mobile devices, approximately the same year. Earnings before taxes in the business fell 18% to $ 796 million, according to the company. Qualcomm said shipments of mobile modems increased by 5%, however.

In its licensing segment, sales fell 6% to $ 1.14 billion and earnings before taxes fell 11% to $ 739 million. Qualcomm did not record any license fees in Apple's quarter, which is withholding Qualcomm's royalty payments in a dispute over the company's licensing practices.

Qualcomm has accused Apple of transferring its intellectual property to Intel Corp., which supplies chips for new model iPhones.

Meanwhile, earlier this week, a federal judge ruled that Qualcomm must license some of its patents to rival chip suppliers in an antitrust lawsuit filed by the Federal Trade Commission.

Qualcomm shares fell 3.5% in post-closing operations. The company's shares closed 0.7% before Wednesday.

For the current quarter, the first in the company's new fiscal year, Qualcomm forecast revenues between $ 4.5 billion and $ 5.3 billion, and earnings per share between 78 cents and 88 cents. Adjusted earnings are expected to be between $ 1.05 per share and $ 1.15 per share, before badysts' consensus of 94 cents per share.

Write to Micah Maidenberg at [email protected]

Qualcomm Inc. suffered a loss in its last quarter, as sales at the unit of the company that develops mobile modem technology remained stable and its licensing business continued to be affected by a continuing struggle with Apple Inc.

Qualcomm, based in San Diego, on Wednesday posted a loss of $ 493 million, or 35 cents per share, compared to a gain of $ 168 million, 11 cents per share, in the same period last year. Qualcomm also had problems with expenses in the most recent quarter, as total costs increased 16% to $ 6.46 billion.

On an adjusted basis, Qualcomm reported earnings of 90 cents per share, surpbading the 83 cents per share expected by badysts surveyed by FactSet.

Qualcomm recorded $ 5.8 billion in revenue for the quarter, 2% less than the previous year. Analysts expected $ 5.53 billion.

The company recorded $ 4.65 billion in sales in its segment that creates sets of chips used in mobile devices, approximately the same year. Earnings before taxes in the business fell 18% to $ 796 million, according to the company. Qualcomm said shipments of mobile modems increased by 5%, however.

In its licensing segment, sales fell 6% to $ 1.14 billion and earnings before taxes fell 11% to $ 739 million. Qualcomm did not record any license fees in Apple's quarter, which is withholding Qualcomm's royalty payments in a dispute over the company's licensing practices.

Qualcomm has accused Apple of transferring its intellectual property to Intel Corp., which supplies chips for new model iPhones.

Meanwhile, earlier this week, a federal judge ruled that Qualcomm must license some of its patents to rival chip suppliers in an antitrust lawsuit filed by the Federal Trade Commission. The ruling has the potential to change Qualcomm's practice of licensing device makers rather than chip providers, according to some badysts.

During a call with badysts on Wednesday, Chief Executive Steve Mollenkopf said the FTC's decision "is incorrect." He said the company is focused on resolving the case, which goes to trial in January.

"There is nothing in the order that complicates that, and in the meantime, we are not obliged to do anything differently with the business," Mollenkopf said.

A slowdown in global smartphone sales is aggravating Qualcomm's licensing problems. The company expects shipments of modem chips to decrease by 22%, or approximately 185 million units, during the three months ending in December. The company said the decline partly reflects Apple's launch of new iPhones without Qualcomm modem chips.

Qualcomm shares fell 4.3% in post-closing operations. The company's shares closed 0.7% before Wednesday.

For the current quarter, the first in the company's new fiscal year, Qualcomm forecast revenues between $ 4.5 billion and $ 5.3 billion, and earnings per share between 78 cents and 88 cents. Adjusted earnings are expected to be between $ 1.05 per share and $ 1.15 per share, before badysts' consensus of 94 cents per share.

Qualcomm has faced a series of challenges in its last fiscal year. Earlier this year, the company declined a takeover bid for Broadcom Inc., an agreement ultimately nullified by President Trump.

In June, Qualcomm rejected its $ 44 billion acquisition proposal from Dutch chip maker NXP Semiconductors NV after failing to obtain approval from Chinese regulators.

Qualcomm also remains locked in a separate dispute with Chinese smartphone maker Huawei Technologies Co., which is also withholding royalty payments.

Qualcomm said it has repurchased 254.6 million shares worth $ 21.14 billion in the September period, fulfilling the commitment it made after abandoning its bid for NXP.

– Tripp Mickle contributed to this article.

Write to Micah Maidenberg at [email protected]


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