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Qualcomm Chip Business Stays Strong

Qualcomm Chip Business Stays Strong

Enterprise & IT Nov 1,2017 0

Robust demand for Qualcomm's Snapdragon chips in China is making up for lost revenue from a legal brawl with Apple.

Revenue from Qualcomm's Qualcomm CDMA Technologies (QCT) unit for the fiscal fourth quarter and year ended September 24, 2017
rose 13 percent to $4.65 billion.

"We continue to see strong growth trends for global 3G/4G device shipments," Chief Executive Steve Mollenkopf said.

In contrast, revenue from Qualcomm's licensing business fell 36 percent to $1.21 billion in the same period.

The latest quarter included a charge of $778 million for the fine imposed by the Taiwan Fair Trade Commission for anti-trust violations of its chip technology.

Excluding items, Qualcomm earned 92 cents per share. Revenue fell 4.5 percent to $5.91 billion.

"Our fourth quarter and fiscal 2017 results reflect continued product leadership and profitability improvement in our semiconductor business, including strength in adjacent opportunities outside mobile," said Steve Mollenkopf, CEO of Qualcomm Incorporated. "We continue to see strong growth trends for global 3G/4G device shipments and are focused on protecting the established value of our technologies and inventions. We are leading the industry to 5G and are well positioned with our product and technology leadership to continue our expansion into many exciting new product categories, such asautomotive, mobile computing, networking and the Internet of Things."

Sales in Qualcomm's fiscal first quarter will be $5.5 billion to $6.3 billion. Earnings per share, excluding some items, will be 85 cents to 95 cents, the San Diego-based company said in a statement.

Steve Mollenkopf is besieged by legal disputes with Apple, one of his largest customers, and government agencies around the world that threaten to undermine Qualcomm's technology licensing business, which generates most of its profit.

Qualcomm said on Thursday that it continues to exclude Apple patent fee payments from forecasts. Qualcomm also mentioned other companies, including Apple manufacturing partners, what haven't paid fees.

Earlier this week, Apple was reported to be designing iPhones and iPads for 2018 that don't use components from Qualcomm. If that business went away it would cut Qualcomm revenue by about 7.5 percent, according to estimations.

Qualcomm is also trying to close its $47 billion purchase of NXP Semiconductors NV. The deal is facing regulatory examination in Europe and opposition from some shareholders.

The deal is still on track but may close next year, Qualcomm's Chief Financial Officer George Davis said on Thursday.

Tags: Qualcomm
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