Steven Mollenkopf, CEO of Qualcomm
Mike Blake Reuters
Qualcomm rose more than 13% after Wednesday’s hour as the company reported third-quarter fiscal earnings in excess of expectations and announced a long-term patent agreement with Huawei to address an important unanswered legal issue for the company.
Here̵7;s how it went against the Refinitiv consensus assessments:
- EPS: $ 0.86 (non-GAAP) compared to $ 0.71.
- Revenue: $ 4.89 billion compared to $ 4.8 billion.
However, it is difficult to compare the reported revenues with analyst estimates, as the coronavirus pandemic continues to affect the global economy and complicate forecasting.
Revenues were flat over the year, with diluted EMU increasing by 8% per year.
Qualcomm will benefit greatly from the 5G networks under construction and has announced a strong forecast for the coming quarter, saying 5G is starting to become an economic powerhouse. Qualcomm sells modem chips to phone manufacturers and licenses critical patents to anyone using 5G technology.
Qualcomm said it has entered into a long-term patent agreement with Huawei, which will be a major seller of 5G phones and network equipment. Qualcomm resolved similar patent lawsuits last year with Apple’s major phone buyer.
“Qualcomm has signed a long-term licensing agreement with Huawei, stating that Qualcomm is approaching a period of long-term licensing agreements with each major phone maker in the near future,” said Patrick Moorhead, an analyst at Moor Insights.
Qualcomm said it expected shipments of 5G handsets to be 15% lower than a year in the quarter that ended in September, in part because the customer delayed “launching the global 5G handset.” Qualcomm expects non-GAAP EPS to decline to $ 0.25 per share. Qualcomm said it still expects Between 175 million and 225 million 5G phones will be shipped.
Qualcomm’s approach to 5G phone schedules has changed since last quarter, when Qualcomm said its customers, including Apple, are likely to continue to release 5G phones on previous schedules.
Qualcomm said it expected to report between $ 1.05 and $ 1.25 on non-GAAP diluted EMU, and revenue, excluding certain items, for the quarter ending in September would be between $ 5.5 billion and $ 6.3 billion.