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Chipmaker Qualcomm's revenue misses estimates

Published 25/01/2017, 21:36
© Reuters. FILE PHOTO - A Qualcomm building in San Diego California
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(Reuters) - Qualcomm Inc (O:QCOM) reported a lower-than-expected 3.9 percent rise in quarterly revenue, at a time when the chipmaker is facing multiple legal challenges over its alleged "anticompetitive" tactics.

The company's shares were down nearly 3 percent at $55.20 (43.82 pounds) in aftermarket trading on Wednesday.

Qualcomm also forecast current-quarter adjusted profit of $1.15-$1.25 per share and revenue of $5.5 billion-$6.3 billion.

Analysts on average were expecting a profit of $1.20 per share and revenue of $5.90 billion, according to Thomson Reuters I/B/E/S.

The U.S. Federal Trade Commission and Apple Inc (O:AAPL) have sued Qualcomm accusing the chipmaker of resorting to "anticompetitive" tactics to maintain a monopoly over key semiconductors in mobile phones.

Apple also filed a lawsuit against Qualcomm in Beijing on Wednesday, alleging that the chip supplier abused its clout in the chip industry and is seeking 1 billion yuan ($145.32 million) in damages.

South Korea's antitrust regulator, The Korea Fair Trade Commission, fined Qualcomm 1.03 trillion won in December for what it called unfair business practices in patent licensing and modem chip sales.

The company said on Wednesday the latest quarter included an $868 million charge related to the KFTC investigation.

Qualcomm is a major supplier to both Apple and Samsung Electronics (LON:0593xq) Co Ltd (KS:005930), with the two accounting for 40 percent of the company's $23.5 billion in revenue in 2016.

The Qualcomm Technology Licensing (QTL) business, which contributed about 85 percent of the company's earnings before taxes in 2016, generates royalties earned through the licensing of wireless patents to the mobile industry.

Net income attributable to the company more than halved to $682 million, or 46 cents per share, in the first quarter ended Dec. 25, due to the charge.

Revenue rose to $6 billion from $5.78 billion, but missed analysts' estimate of $6.12 billion.

Excluding items, Qualcomm earned $1.19 per share, just above the average analyst estimate of $1.18.

© Reuters. FILE PHOTO - A Qualcomm building in San Diego California

Qualcomm's shares had risen nearly 20 percent in the past 12 months, compared with the 62.1 percent gain in the broader Philadelphia Semiconductor index (SOX).

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