Qualcomm Posts Loss as Revenue Slips -- 2nd Update
08 Novembre 2018 - 12:50AM
Dow Jones News
By Micah Maidenberg
Qualcomm Inc. swung to a loss in its latest quarter, as sales in
the company's unit that develops mobile modem technology were flat
and its licensing business continued to be hurt by a continuing
fight with Apple Inc.
San Diego-based Qualcomm on Wednesday posted a loss of $493
million, or 35 cents a share, compared with a profit of $168
million, 11 cents a share, in the year-earlier period. Qualcomm
also struggled with expenses in the most recent quarter, as total
costs rose 16% to $6.46 billion.
On an adjusted basis, Qualcomm reported profit of 90 cents a
share, surpassing the 83 cents a share expected by analysts polled
by FactSet.
Qualcomm booked $5.8 billion in revenue for the quarter, off 2%
from a year earlier. Analysts had expected $5.53 billion.
The company booked $4.65 billion in sales in its segment that
creates chip sets used in mobile devices, roughly flat from last
year. Earnings before taxes in the business fell 18% to $796
million, according to the company. Qualcomm said mobile modem
shipments rose 5%, however.
In its licensing segment, sales fell 6% to $1.14 billion and
earnings before taxes dropped 11% to $739 million. Qualcomm didn't
record any licensing revenue in the quarter from Apple, which is
withholding royalty payments from Qualcomm in a dispute over the
company's licensing practices.
Qualcomm has accused Apple of transferring its intellectual
property to Intel Corp., which is supplying chips for new-model
iPhones.
Meanwhile, earlier this week, a federal judge ruled that
Qualcomm must license some of its patents to rival chip suppliers
in an antitrust suit brought by the Federal Trade Commission. The
ruling has the potential to upend Qualcomm's practice of licensing
to device makers rather than chip suppliers, some analysts say.
During a call with analysts Wednesday, Chief Executive Steve
Mollenkopf said the FTC "ruling is incorrect." He said the company
is focused on settling the case, which goes to trial in
January.
"There's nothing in the order that complicates that, and in the
meantime, we're not compelled to do anything differently with the
business," Mr. Mollenkopf said.
A slowdown in global smartphone sales is compounding Qualcomm's
licensing woes. The company expects modem chip shipments to decline
22%, or about 185 million units, during the three months ending in
December. The company said that decline partly reflects Apple's
release of new iPhones without Qualcomm modem chips.
Shares in Qualcomm were down 4.3% in after-hours trading. The
company's stock closed down 0.7% earlier Wednesday.
For the current quarter -- the first in the company's new fiscal
year -- Qualcomm forecast revenue between $4.5 billion and $5.3
billion, and per-share earnings between 78 cents and 88 cents.
Adjusted earnings are expected to be between $1.05 a share and
$1.15 a share, ahead of the consensus forecast from analysts of 94
cents a share.
Qualcomm has faced a series of challenges in its latest fiscal
year. Earlier this year, the company fended off a takeover bid by
Broadcom Inc., a deal ultimately quashed by President Trump.
In June, Qualcomm nixed its proposed $44 billion acquisition of
Dutch chip maker NXP Semiconductors NV after failing to win
approval for it from Chinese regulators.
Qualcomm also remains locked in a separate dispute with Chinese
smartphone maker Huawei Technologies Co., which is also withholding
royalty payments.
Qualcomm said it repurchased 254.6 million shares valued at
$21.14 billion in the September period, fulfilling a commitment it
made after abandoning its offer for NXP.
--Tripp Mickle contributed to this article.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
November 07, 2018 18:35 ET (23:35 GMT)
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