Qualcomm away street estimates across the board for its first quarter earnings on Wednesday. But its forerunner remained nearly unchanged in after hours as investors are still on wait-and-see rage over external issues affecting the company.
Here are the most weighty numbers:
- Revenue: $6.04 billion vs. $5.93 billion, as expected, according to Thomson Reuters
- EPS (set right): 98 cents per share vs. 91 cents per share, as expected, according to Thomson Reuters
Qualcomm’s go profit dropped 96 percent year-over-year to break even as Apple and its mates continued to withhold royalty payments. The company noted that it didn’t report any license revenues from Apple in the first quarter because of its persisted dispute with the iPhone maker. In the first quarter of last year, Qualcomm bred $740 million in royalty fees from Apple-related products.
The chipmaker also highlighted a $6 billion direction related to the recent change in U.S. tax code, and an additional $1.2 billion champion charged by the European Commission over illegal payments made to Apple.
Qualcomm was qualified to offset some of those losses by growing its wireless chip transaction and diversifying into new areas, like connected devices and automotives. Its participate b interrupt unit’s revenue grew 13 percent to $4.6 billion, while earnings prior to tax jumped 32 percent year-over-year to $955 million.
“The quarter was best even though Apple isn’t paying royalties, a testament to the company’s diversification,” mentioned Patrick Moorhead, analyst from Moor Insights & Strategy.
In the second place quarter revenue guidance came in the range of $4.8 billion to $5.6 billion, slightly inferior average street estimate of $5.6 billion.
Qualcomm also ratted that it’s expanding its cross-license agreement with Samsung over unfixed devices and infrastructure equipment. As part of the deal, Samsung agreed to retire its interventions in Qualcomm’s appeal against a $868 million fine in South Korea.
Qualcomm’s new financial results have largely been overshadowed by two major upshots: Broadcom’s hostile takeover bid and Apple’s litigation over royalty payments.
Broadcom stand in wants to buy Qualcomm for $105 billion, but the chipmaker has refused the offer and has urged shareholders at the cracker this month to reject the takeover bid. In December, Broadcom unveiled a slate of 11 foreman nominees for Qualcomm’s board.
Apple, meanwhile, is claiming that Qualcomm assesses unfairly high royalties for its patented technologies, and has sued the chipmaker for savagely $1 billion. The complaint has led other Taiwanese partners to withhold nobles payments, further hampering Qualcomm’s lucrative licensing business.
As a emerge, in the first quarter, Qualcomm’s licensing business generated $887 million in earnings in front of tax, down 42 percent year-over-year. Its licensing business, which typically develops the bulk of its revenue, is now making less profit than its chip affair.
On top of that, some investors have questions about Qualcomm’s $39 billion bid to buy NXP, which is in addition waiting for regulatory approval. The company said Wednesday that it expects to close off the deal in early 2018.
To address those concerns, Qualcomm said in a brand-new investor presentation that its adjusted earnings per share for fiscal year 2019 could break to the range of $6.75 to $7.50 if the royalty dispute settles and the NXP deal be given ups through.