Qualcomm has forecast fourth-quarter earnings that were above Wall Street expectations, driven by sales of its processors used in 5G apparatus and attaining a settlement with Huawei Technologies.
- Qualcomm forecasts fourth quarter earnings above analyst expectations
- The company also resolved a legal battle with China’s Huawei Technologies
Shares of the company were up as much as 13 percent in extended trading despite a prediction for fourth-quarter chip earnings marginally lower than analysts anticipated due to a postponed “flagship phone launch” analyst think is Apple’s brand new iPhones.
The San Diego-based business also stated it solved a licensing dispute with Huawei, that will cover Qualcomm Inc a catch-up charge of $1.8 billion from the fiscal fourth quarter. While Huawei remains barred from purchasing Qualcomm’s processors beneath US regulations, it’s resumed paying licensing fees for wireless technologies, Qualcomm said.
After resolving a legal battle with iPhone manufacturer Apple this past year, Qualcomm entered 2020 to restart selling processors to Apple and forecasting earnings growth. Qualcomm prediction chip imports marginally according to FactSet data.
CFO Akash Palkhiwala told journalists in an interview that Qualcomm anticipated to make a number of the sales in the first quarter up.
Qualcomm executives didn’t name the client, but analyst think it to be Apple Inc.
While Qualcomm has supplied chips and modems to assist telephones connect to information networks, it’s pushed into selling radio-frequency processors to assist phone manufacturers handle the signs.
Palkhiwala stated Qualcomm anticipated to win earnings with all manufacturers, for example, consumer though he didn’t name clients facing a flagship launching that was delayed from the fourth quarter.
Qualcomm, the world’s largest provider of cell phone chips, said it anticipates current-quarter adjusted earnings between $5.5 billion and $6.3 billion, compared to analysts’ estimates of $5.78 billion, based on IBES data from Refinitiv.
Qualcomm, which creates most of its gains by licensing its technologies to mobile phone manufacturers and many others, stated licensing revenue in the segment has been $1 billion, well based on FactSet.
Revenue from its processor section, its biggest by earnings was $3.80 billion, compared to estimates of $3.90 billion.
The company stated it sent 130 million processors capable of wireless data links, in comparison to estimates of 134.7 million, based on FactSet data. The prices set average selling prices for processors at $29.23, lower compared to $32 from the prior quarter once the company had published higher-priced flagship chips.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our content partners at Thomson Reuters. Reporting by Munsif Vengattil in Bengaluru and Stephen Nellis in San Francisco. Editing by Maju Samuel and Jonathan Oatis.
To stay on top of the latest developments across the platform economy and gain access to our problem-solving tools and content sets, you can subscribe for just $19 per month.