Qualcomm shares jumped in extended trading on Wednesday after the chipmaker reported better-than-expected quarterly results and said it plans to repurchase as much as $30 billion in stock.
The buyback move — an upward revision from the $10 billion repurchase program announced in May — came as a result of Qualcomm saying it would terminate its plan to purchase NXP by the end of the day, when a self-imposed deadline expires.
The company will hold a press conference call at 4:45 p.m. Eastern time.
Here are the key numbers:
- Earnings: $1.01 per share, excluding certain items, vs. 71 cents per share as expected by analysts, according to Thomson Reuters.
- Revenue: $5.6 billion, vs. $5.19 billion as expected by analysts, according to Thomson Reuters.
The company said in a statement that revenue in the quarter grew 4 percent from the prior year.
The majority of Qualcomm’s revenue comes from its CDMA Technologies business, which makes chips for phones and other devices. In the fiscal third quarter, that unit produced $4.09 billion in revenue, below the $4.11 billion FactSet analyst consensus.
Qualcomm’s patent business generated $1.47 million in revenue, higher than the $976 million consensus estimate.
During the quarter, Qualcomm announced an artificial intelligence research group and the Snapdragon 850 chip for ‘always connected’ Windows 10 PCs.
For its fiscal fourth quarter, Qualcomm said it expects earnings of 75 cents to 85 cents a share, excluding certain items, on $5.1 billion to 5.9 billion in revenue. Analysts had expected earnings of 76 cents and sales of $5.45 billion, according to Thomson Reuters.
The stock rose about 3 percent to $61.36 after the market close. It’s down 7.2 percent this year. NXP stock, meanwhile, fell 1 percent to $97 after market close and is down almost 15 percent since the beginning of 2018.
Qualcomm announced a plan to buy chipmaker NXP in October 2016. The deal was delayed due to regulatory hurdles, including in China, which is in the midst of a trade war with the U.S. Chinese regulators have until late on Wednesday to give final approval.
“The environment is obviously quite difficult from a geopolitical point of view, at least right now,” Qualcomm CEO Steven Mollenkopf told analysts on the company’s fiscal second-quarter earnings call.
Executives said the company would repurchase shares of its stock if the proposed $44 billion fell apart. CNBC’s reported earlier on Wednesday that Qualcomm executives were planning to announce a share buyback and were not expecting final approval of the deal.
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