Qualcomm’s earnings top estimates as modem chip sales surge

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(Reuters) – Chipmaker Qualcomm Inc’s (QCOM.O) earnings and revenue topped Wall Street forecasts for the first fiscal quarter as demand surged for its chips used in smartphones and cars, making up for a fall in licensing revenue. The results come as San Diego-based Qualcomm tries to rebuff a $103-billion takeover approach by Broadcom Ltd (AVGO.O) and close its long-pending $38-billion deal to buy automotive chip maker NXP Semiconductors (NXPI.O). Qualcomm is trying to convince shareholders that it can boost earnings as a standalone company through a $1 billion cost reduction plan and by resolving license disputes including a high-profile patent battle with Apple Inc (AAPL.O). Strong quarterly results in Qualcomm’s CDMA technologies (QCT) unit that makes modem chips contrasted with a steep fall in revenue in the licensing business. Weighed down by the Apple dispute, the licensing business posted a 28 percent fall in revenue to $1.30 billion in the first quarter ended Dec. 24. Apple sued Qualcomm last January, accusing it of overcharging for chips and of refusing to pay some $1 billion in promised rebates. Revenue at the QCT business rose 13 percent to $4.65 billion. Qualcomm posted a net loss of $5.95 billion compared to a profit of $682 million a year earlier, reflecting a $6 billion one-time charge because of new U.S. tax laws. Excluding one-time items, Qualcomm earned 98 cents per share, topping analysts’ average estimate of 91 cents, according to Thomson Reuters I/B/E/S. Revenue rose 1.2 percent to $6.07 billion and exceeded analysts’ estimates of $5.93 billion. Shares of the company were slightly lower at $67.70 in after-hours trading on Wednesday. Reporting by Sonam Rai in Bengaluru; Editing by Sai Sachin RavikumarOur Standards:The Thomson Reuters Trust Principles.
Source: Reuters