Data Centre

Networks

Qualglumm: Still no royalties from Apple, tax hits, EU fine, flat sales

Investors give shares a bumpy ride... and settle on no change in after-hours trading

By Thomas Claburn in San Francisco

2 SHARE

US chip designer Qualcomm on Wednesday reported $6.1bn flat-growth revenues for its first fiscal quarter of 2018, which ended on December 24, 2017.

The stronger-than-expected results come a week after the wireless networking, processor crafting, and patent-wielding biz was hit with a $1.2bn fine by EU regulators over payments to keep Apple from ditching its chips for those of competitors.

Apple coincidentally sued Qualcomm a year ago for about $1bn, claiming unreasonable prices and unfair competition. The legal battle has since sprawled into a handful of other countries beyond the US and prompted patent infringement countersuits from the San Diego, California-based company.

Qualcomm is also trying to fend off a hostile $105bn takeover bid from Broadcom, which has accused the chip biz of being willing to "say anything to remain a standalone company." Earlier this month, it sent a letter to shareholders advising them to reject the bid.

The EU penalty, together with $6bn charge tied to US tax code changes, puts the firm's GAAP loss-per-share at $4.03 and a net loss of $6bn versus a year-ago profit of $682m. If you toss generally accepted accounting practices out the window, the company's non-GAAP earnings-per-share amount to $0.98.

Bump

Analysts on average had been expecting $0.91 per share and revenue of $5.93bn, according to Thomson Reuters. The company's stock price had a bumpy ride taken in after-hours trading, and it's now flat at $68.15 apiece.

Also figuring into investor optimism is Qualcomm's announcement of an expansion of its cross-licensing arrangement with Samsung.

In its earnings release, Qualcomm said is fiscal Q1 and its previous quarter results "were negatively impacted by our continued dispute with Apple and its contract manufacturers (who are Qualcomm licensees), as well as the previously disclosed dispute with another licensee."

The company said it didn't see any revenue from licensing fees owed by Apple or another unnamed licensee during this period. At year ago, licensing revenue from Apple and the undisclosed firm amounted to $740m.

Looking ahead, Qualcomm anticipates revenue ranging from $4.8bn to $5.6bn for its fiscal Q2 2018.

On the Qualcomm earnings call, in response to a question about future revenue projections, CFO George Davis suggested Qualcomm doesn't see a need to quickly settle its legal and licensing dispute with Apple.

"We're not highly dependent on a peace dividend to deliver this number," he said. ®

Sign up to our NewsletterGet IT in your inbox daily

2 Comments

More from The Register

Chip-for-tat escalates: Qualcomm's billion-Euro bond to block Apple iPhone sales in Germany

Some mobes off the shelves pending appeal in international patent battle drama

Oh, and another thing, Qualcomm tells court: Apple handed Intel our chipping source code

Cupertino: If you've got any evidence, bring it

Setback for Qualcomm: It has to license modem tech to competitors

FTC antitrust lawsuit due for trial next year

Qualcomm all ye faithful: 5G's soon triumphant... like 2020 soon. Really

We just modem down with that headline (OK maybe not)

Three no Trump: China says it's 'open' to giving Qualcomm-NXP wedding its blessing

Too late Xi cried, waving dead semiconductor deal in the air

Qualcomm chip roadmap leaks: Now with added hotdog*

No integrated 5G just yet

Qualcomm data centre tech veep jumps ship

Whither the Centriq now?

US trade watchdog, mobe makers queue to smack Qualcomm as antitrust trilogy opens

Will there be a deal or no deal?

A billion-dollar question: What was really behind Qualcomm's surprise ten-digit gift to Apple?

Is the chip company an abusive monopolist – or tough negotiator?

Apple yanks iPhones from sale in Germany – and maybe China, too – amid Qualcomm spat

Courts crack down on Cupertino idiot-tax operation as tech patent war explodes