Qualcomm reported net profit down 89 percent year-on-year in its fiscal fourth quarter to September to USD 0.2 billion or USD 0.11 per share. The company's profits were hit by Apple and another customer withholding licence fees due to legal disputes with Qualcomm.
The chipmaker's revenues were also down 5 percent from a year ago, while growing 10 percent sequentially thanks to seasonal effects. Sales of USD 5.9 billion were in line with Qualcomm's guidance.
In addition to Apple and its contract manufacturers not paying royalties, Qualcomm said another unnamed licensee underpaid licence fees in Q2 and did not pay anything in Q3 and Q4. The company expects the problems will continue until the legal cases are resolved.
The company also took a charge of USD 778 million, or 52 cents a share, in the fourth quarter for the competition fine it received in Taiwan. This reduced EPS to USD 0.11 in the quarter, compared to a forecast of USD 0.55-0.65.
Underlying revenues at the chip business, excluding the licensing arm, were still growing, up 13 percent year-on-year to USD 4.65 billion, and the EBIT margin improved to 21 percent from 17 percent a year ago. MSM shipments increased 4 percent annually and 18 percent sequentially to 220 million.
No improvement in earnings is expected for fiscal Q1, with Qualcomm forecasting a 20-29 percent drop to USD 0.85-0.95 per share. Revenues are expected little changed year-on-year, at USD 5.5-6.3 billion versus USD 6.0 billion a year ago. MSM shipments are forecast flat to slightly higher on an annual and sequential basis, at 220-240 million in Q1.
On the pending acquisition of NXP Semiconductors, Qualcomm said it is still aiming to close the deal by year-end, but admitted the closing may be delayed to "early 2018".
