Qualcomm Inc on Wednesday forecast fourth-quarter revenue largely above Wall Street expectations, powered by strong sales of more lucrative 5G devices despite a weak overall smartphone market.
Share this content
REUTERS: Qualcomm Inc on Wednesday forecast fourth-quarter revenue largely above Wall Street expectations, powered by sales of its chips used in 5G devices and reaching a settlement with Huawei Technologies Co Ltd .
Shares of the company were up as much as 13per cent in extended trading despite a forecast for fourth-quarter chip revenue slightly lower than analysts expected because of a delayed "flagship phone launch" analyst believe is Apple's new iPhones.
The company also said it resolved a licensing dispute with Huawei, which will pay Qualcomm a catch-up payment of US$1.8 billion in the fiscal fourth quarter. While Huawei is still barred from buying Qualcomm's chips under U.S. regulations, it has now resumed paying licensing fees for wireless technology, Qualcomm said.
After resolving a bruising legal battle with iPhone maker Apple Inc last year, Qualcomm entered 2020 with a deal to resume selling chips to Apple and predicting revenue growth from 5G devices, which fetch higher chip revenue per phone for the company. Qualcomm forecast fourth-quarter chip shipments with a midpoint of 155 million units, slightly below expectations of 159 million units, according to FactSet data.
Chief Financial Officer Akash Palkhiwala told Reuters in an interview that Qualcomm expected to make up some of those sales in the fiscal first quarter.
"We're seeing a partial impact from the delay of a flagship phone launch. And so what we've seen is a slight delay that pushes some of the units out from the September quarter to the December quarter for us," he said.
Qualcomm executives did not name the customer, but analyst widely believe it to be Apple.
While Qualcomm has long supplied processors and modems to help phones connect to wireless data networks, it has pushed into also selling radio-frequency chips to help phone makers handle the more complex signals involved in 5G networks.
Palkhiwala said Qualcomm expected to win sales with all major smartphone makers, including the customer facing a delayed flagship launch in the fiscal fourth quarter, though he did not name speciRead More – Source