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Qualcomm Pegs Payment from Apple of $ 4.5 billion to $ 4.7 billion



Qualcomm will book a one-time payment of $ 4.5 billion to $ 4.7 billion the next quarter from its settlement with Apple in a patent battle, said mobile chip maker Wednesday when it reported its quarterly earnings.

It was the first time investors looked at how the deal would help Qualcomm's bottom line, and the company's stock fell about 3 percent in retrospect. The shares had risen more than 50 percent in recent weeks, reflecting investor relief on the agreement. However, Qualcomm's forecasts suggested that Apple's license fees would not significantly increase revenue as Apple gets royalties that it didn't pay while the two companies were celebrating.

Except for this payment, Qualcomm estimated $ 4.7 billion to $ 5.5 billion in revenue over the next period, the third quarter, with a mid-point slightly below $ 5.29 billion analysts had expected, according to IBES data from Refinitiv.

"We see a break ahead of a 5G launch," Cristiano Amon, Qualcomm's chip manager, said at a conference call with investors, referring to the next-generation mobile network, which will roll out this year and next.

The settlement with Apple, which includes a six-year patent certificate and a chip delivery agreement, is expected to generate $ 2 per share in additional earnings, Qualcomm has said. Financial details have not been disclosed, but the deal is expected to help Qualcomm to regain the prominent mobile chip position it held in early 2010.

On Tuesday, Apple said the gross margin guidance, which was largely unchanged from previous quarters, included Qualcomm settlement. Overall, the two data indicate that the patent license agreement had little short-term financial impact.

For the last quarter, which ended in March, Qualcomm gave a net income of $ 663 million, or 55 cents per share, up from $ 330 million, or 22 cents per share the year before.

Revenue fell to $ 4.88 billion, but hit analysts' estimates at $ 4.80 billion.


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