What do you call a spreadsheet with decent numbers for a change? qualcomm_q3_2016.xlsx

Qualcomm is crediting strong sales in China and an infusion of back royalty payments for a better-than-expected quarterly return.

The California-based mobile chip designer said that it was able to turn around a lacking performance last quarter thanks to improved licensing revenues from smartphone sales.

Additionally, Qualcomm says it is getting more money in royalty payments from Chinese device manufacturers thanks to a new set of deals that it hopes will lead to more accurate reporting of hardware sales.

"We delivered strong results this quarter, with EPS well ahead of our guidance based on meaningful progress with licensees in China," CEO Steve Mollenkopf said of the quarter. "Our chipset business is also benefiting from a strong new product ramp across tiers, particularly with fast-growing OEMs in China."

Qualcomm's Q3 numbers [PDF] included:

• Revenues of $6bn were a 4 per cent increase over $5.8bn in Q3 2015.
• Operating income of $1.6bn was up 29 per cent to over 1.2bn year-over-year.
• Net income was $1.4bn, a 22 per cent increase on $1.2bn in Q3 2015.
• Non-GAAP earnings per share were $1.16, topping the $0.97 analysts had estimated.
• Qualcomm hauled in around $400m in what it terms 'catch up' payments from LG and other handset vendors that had under-reported their sales (and royalty fees) to Qualcomm in previous quarters.

The collection of those payments has long been an issue of contention for Qualcomm. The chipmaker has accused hardware vendors, particularly those in China, of under-reporting the number of chips they sold as a way to avoid paying out higher royalties to Qualcomm.

The royalty drama is not limited to China. In Korea, Qualcomm is battling with authorities over anti-trust charges related to the royalty payments.

Still, industry analysts believe that the deal Qualcomm has forged with the hardware makers should provide a sustained boost in the coming months and years. Gartner research vice president Mark Hung notes that the deals credited for bringing in the "catch up" money will also boost revenues going forward.

"Having better visibility there definitely helps," Hung told El Reg. "As these deals start working out, it is going to definitely help them going forward."

There are, however, plenty of things for Qualcomm execs to worry about. Hung notes that despite better-than-expected smartphone sales in China, growth in the handset market globally is still slowing down.

Additionally, Hung notes that the loss of some of Apple's business in iPhone components would also provide Qualcomm with some worry over the long term.

Qualcomm stock was up 6.4 per cent to $59.39 in after-hours trading. ®