(Reuters) – Qualcomm Inc’s (QCOM.O) on Wednesday forecast current-quarter earnings above Wall Street’s expectations, as all of the major licenses, the segment of the benefits of a deal with Apple Inc (AAPL.And the annual vacation quarter and the momentum that it brings.
FILE PHOTO: a Qualcomm sign is pictured at the Mobile World Congress (mobile world CONGRESS), Shanghai, China, 28th June, 2019 at the latest. REUTERS/Aly Song
Qualcomm, the world’s biggest supplier of mobile-phone chips, and derives most of its profit from a segment that is looking for technologies and licenses them. The company’s forecast of between $1.3 billion and $1.5 billion in revenue for the segment for the fiscal first quarter, which is above the expectations of the analyst, $1.23 billion, according to IBES data, Refinitiv.
The licensing business drove adjusted earnings forecast by an average of 85 cents per share, well above analyst expectations of 83 cents per share, according to the Refinitiv of the data. The return of Apple’s sales this also offers We have a seasonal boost in the fiscal first quarter, which ends in December, when Apple traditionally sells the largest number of devices and this enables us to provide the most in royalties.
On the memory side, the Qualcomm chief executive Steve Mollenkopf told Reuters in a recent interview that the company has won deals to supply a 230-unit design, with 5 g of the chips 150 for a quarter of a year ago.
“We’re continuing to see strength in the course of the business, in particular, which we have included in the deal entered this year with Apple, we are on the front-end, the 5 g of the transition, which has an impact on the product and the business,” Mollenkopf said. “We are closer and we are really seeing the signs that we need to rely on that.”
The news sent the shares up almost 5.1% to $89.00, in after-hours trading.
The company has resolved the licensing dispute with a major customer such as Samsung Electronics Co Ltd (005930.KS) and Apple.
It helps that most of Qualcomm’s customers actually pay for it,” Patrick Moorhead of Moor Insights & Strategy, said.
But Qaulcomm in a licensing dispute with Huawei. “While the negotiations are continuing, and we have not reached a final agreement with Huawei,” Qualcomm said on Wednesday.
We have said that it is expected to be between 1.75 billion euros and 1.85 billion smart devices with modem chips, including 175 million to € 225 million in 5G handsets, in order to be sold in 2020. Because I collect license fees on devices which use the mobile connectivity to wireless data networks, a greater number of devices sold, which often results in higher sales and profits.
The results come a week after Apple calms down Wall Street’s nerves, and with improved sales in China, the world’s largest smartphone market, following strong earnings from chipmaker Intel Corp. (a). (INTC.(O) in the past month.
We have said that for the fiscal fourth quarter, which ended on Sept. 29. the revenues in the licensing segment amounted to $1.16 billion, beating estimates of $1.10 billion, according to data from FactSet.
With the exception of the items, the company earned 78 cents per share, topping analysts ‘ average estimate of 71 cents.
Revenues for the fourth quarter fell about 17% to $4.81 billion, but beat analysts ‘ estimates of $4.70 billion.
Reporting Munsif Vengattil in Bengaluru and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila and Leslie Adler