Qualcomm Exceeds Estimates With Fourth Quarter Results – But Apple Still Refusing To Pay
Today Qualcomm, maker of all things Snapdragon mobile SoC, posted a mild beat on earnings, and revenue for the fourth quarter of fiscal 2018.
The company, based in San Diego, California, reported earnings of 90 cents a share versus Wall Street expectations of 83 cents a share, and $5.8 billion in revenue versus an expected $5.52 billion.
As this is Qualcomm’s (NASDAQ:QCOM) final quarter of its fiscal year, the firm counted revenue of $22.7 billion in FY2018, up slightly from $22.3 billion from the previous year.
If you don’t follow the company closely, perhaps the most important thing to be aware of is its ongoing battle with iDevice giant, Apple Inc. Apple (NASDAQ:AAPL) has halted licensing payments, claiming that they are unreasonable and illegal. Qualcomm Technology Licensing, QTL, states that it did not receive any royalty payments from Apple for all of fiscal 2018 and reckons the owed figure to sum around $7 billion.
Qualcomm gearing up for battle against Apple
CEO Steve Mollenkopf stated on the call that Apple and Qualcomm were engaging in ongoing conversation in regards to the licensing dispute. With that somewhat ambiguously encouraging statement, and given the mild beat on earnings, shares rose about two-and-a-half percent in after hours trading on Wednesday. However Qualcomm stock has sank even further since, now down almost four percent as of this writing.
Apple spokespeople seemed to contradict Mollenkopf’s comments to investors, stating that they are not in talks with Qualcomm ‘at any level’ earlier this morning. They go on to say they are gearing up for a full trial here in the States against Qualcomm on this matter, and all things considered, settlement is looking less and less likely at this point.
Qualcomm is still hoping to drive growth with the impending release of 5G handsets.
We are executing well on our strategic objectives, including driving the commercialization of 5G globally in 2019 and returning significant capital to our stockholders.
Things are looking choppy for the chip giant. Just yesterday we brought you the news that Qualcomm is going to be forced to license its patents that are integral to modems that allow handsets to access cellular networks.
Now instead of selling modems, the firm will be reluctantly selling patent licenses that will allow others to build their own modems. Previously, Samsung wasn’t able to leverage its in-house Exynos chipsets in US handsets as they lacked the tech to access US networks. Now, Samsung could produce its own modems that will allow future Galaxy phones to use Exynos processors (instead of Qualcomm’s Snapdragon SoCs) in the lucrative American market.