Qualcomm reported results for its fiscal third quarter to June down sharply from a year earlier, due to the slump in the mobile phone market. Nevertheless, earnings fell less than the company's guidance, to USD 0.74 from USD 1.75 a year ago, and Qualcomm said it ended its long-running licensing dispute with Huawei with a new agreement.
Revenues nearly halved year-on-year to USD 4.89 billion from USD 9.64 billion, in line with the company's forecast. MSM shipments were down 17 percent to 130 million, also in line with the forecast range. Adjusted pretax profit was little changed, at USD 1.10 billion.
The settlement with Huawei was reached this month and will include back revenues as well as a retroactive cross-licensing deal starting 01 January 2020. Huawei's previous licence had expired in 2018, and the company has made only token payments to Qualcomm since then. Qualcomm expects to start receiving royalties due on sales by Huawei in the September quarter as well as another USD 1.8 billion to settle its back payments.
For its fiscal fourth quarter to September, Qualcomm expects the Covid-19 pandemic and a delay in a global 5G flagship smartphone launch to take 25 cents off its EPS. This assumes an around 15 percent annual fall in handset shipments. As a result, revenues are estimated at USD 7.3-8.1 billion, MSM shipments at 145-165 million, and EPS at USD 2.12-2.32.
