Qualcomm Tops Forecasts

November 8, 2019

Qualcomm reported results for its fiscal fourth quarter and year ended September 29, 2019. Qualcomm had adjusted earnings per share of 78 cents, with investors looking for just 71 cents. Revenue came in at $4.8 billion topping expectations of $4.7 billion.

“We delivered a strong quarter, with Non-GAAP earnings per share above the high end of our guidance range, primarily on solid performance in our QTL segment,” said Steve Mollenkopf, CEO of Qualcomm Incorporated. “We exit the fiscal year having successfully executed on our strategic priorities: helping to drive the commercialization of 5G globally, completing a number of important anchor license agreements and executing well across our product roadmap. Our technology and inventions leave us extremely well positioned as 5G accelerates in 2020.”

“The complexity and expansion of cellular technologies beyond the smartphone into nearly every industry play directly to Qualcomm’s strengths and are why we believe 5G will represent the single biggest opportunity in Qualcomm’s history,”

“There are now 40 [original equipment manufacturers] and over 30 operators launching or announcing 5G products or commercial service, up from approximately 20 OEMs and operators respectively at the start of the year,” Mollenkopf said.

QTL revenues in the fourth quarter and fiscal 2018 included $100 million and $600 million, respectively, received under an interim agreement with Huawei. QTL revenues in fiscal 2019 included $450 million paid under a second interim agreement with Huawei that concluded in the third quarter of fiscal 2019, and although negotiations continue, we have not reached a final agreement with Huawei. This represents a minimum, non-refundable amount and does not reflect the full amount of royalties due under the underlying license agreement. We did not record any revenues in the fourth quarter of fiscal 2019 for royalties due on the sales of Huawei’s products.

$4.7 billion of revenues, or $3.23 per share, resulted from settlement agreements with Apple and its contract manufacturers in the third quarter of fiscal 2019.

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