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Qualcomm Results Up As Apple Settlement Offsets Weak Phone Market

Qualcomm reported revenues of USD 9.6 billion for its fiscal third quarter to June, up 73 percent from a year earlier thanks to resuming business with Apple. This helped offset a softer smartphone market, as the chipmaker awaits the ramp up of new 5G devices.

Excluding the Apple settlement, revenues fell 13 percent from a year earlier, and Qualcomm forecast a further decline of 12-26 percent in revenues in the current quarter. MSM shipments fell 22 percent year-on-year to 156 million in Q3, and Qualcomm expects these to drop to 140-160 million in Q4, equal to an annual fall of 31-40 percent.

The Apple settlement was worth USD 4.7 billion in one-time licensing revenues to cover the past two years, and Qualcomm also resumed booking current revenues from Apple and its manufacturers. The company also booked USD 150 million in revenues from an interim settlement with Huawei, with which no final licensing deal has been reached yet.

In addition, Qualcomm recorded tax expenses of USD 2.5 billion in the quarter to write off deferred tax assets disputed by US authorities and took a charge of USD 275 million for its latest competition fine from the EU. Despite these charges, net profit was still up 79 percent year-on-year to USD 2.1 billion or USD 1.75 per share.

On an adjusted basis, EPS fell 20 percent to USD 0.80, and Qualcomm forecast a further drop of 16-27 percent in fiscal Q4 to USD 0.65-0.75.―Telecompaper

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