FILE PHOTO: A sign on the Qualcomm campus is seen in San Diego, California, U.S. November 6, 2017. REUTERS/Mike Blake/File Photo
January 31, 2018
(Reuters) – Chipmaker Qualcomm Inc’s <QCOM.O> earnings and revenue exceeded Wall Street forecasts for the first fiscal quarter as demand surged for its chips used in smartphones and cars, making up for a fall in licensing revenue.
The results come as the San Diego-based chipmaker tries to rebuff a $103-billion takeover approach by Broadcom Ltd <AVGO.O> and close its long-pending $38-billion deal to buy automotive chip maker NXP Semiconductors <NXPI.O>.
Qualcomm is trying to convince shareholders that it can boost earnings as a standalone company through a $1 billion cost reduction plan and by resolving license disputes including a high-profile patent battle with Apple Inc <AAPL.O>.
But its earnings and revenue forecasts for the ongoing March quarter were well below what analysts were expecting, sending Qualcomm shares slightly lower in after-hours trading on Wednesday.
Qualcomm expects $4.8 billion to $5.6 billion in second-quarter revenue and adjusted earnings per share of 65 cents to 75 cents. Analysts had estimated revenue of $5.58 billion and earnings of 85 cents per share, according to Thomson Reuters I/B/E/S.
Revenue at Qualcomm’s CDMA technologies unit rose 13 percent to $4.65 billion in the first quarter ended Dec. 24. The business makes modem chips for phones as well as products for connected devices including cars and speakers.
The licensing business recorded a 28 percent fall in revenue to $1.30 billion, weighed down by the Apple dispute.
Apple sued Qualcomm last January, accusing it of overcharging for chips and of refusing to pay some $1 billion in promised rebates.
“We remain open to finding a path to resolution (with Apple),” Qualcomm Chief Executive Steve Mollenkopf said on a call with analysts.
Qualcomm posted a net loss of $5.95 billion compared to a profit of $682 million a year earlier, reflecting a $6 billion one-time charge because of new U.S. tax laws and a $868 million charge for a fine imposed by the Korea Fair Trade Commission.
Excluding one-time items, Qualcomm earned 98 cents per share, topping analysts’ average estimate of 91 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 1.2 percent to $6.07 billion and exceeded analysts’ estimates of $5.93 billion.
(Reporting by Sonam Rai in Bengaluru and Stephen Nellis in San Francisco; Editing by Sai Sachin Ravikumar)
