Qualcomm, Inc. 3Q 2017 Earnings: Shares Fall After Results, Guidance -

Qualcomm, Inc. 3Q 2017 Earnings: Shares Fall After Results, Guidance

Jul 19, 2017Jeremy ParkinsonFinance0

The Qualcomm 3Q 2017 earnings report was released after closing bell tonight. The chip maker reported non-GAAP earnings of 83 cents per share on $5.37 billion in sales, compared to the consensus estimates of 81 cents per share on $5.26 billion in revenue. In the same quarter a year ago, Qualcomm reported $1.16 per share in earnings on $6 billion in sales.

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Qualcomm 3Q 2017 earnings

Qualcomm 3Q 2017 earnings amounted to 58 cents per share on a GAAP basis, down from 97 cents per share in last year’s third quarter.

Earnings before taxes in the chip maker’s QCT segment rose to $575 million from $365 million in the year-ago quarter. The segment’s earnings before taxes accounted for 14% of revenues. Qualcomm shipped 187 million MSM chips during the third quarter, compared to 201 million in last year’s third quarter.

Qualcomm’s QTL segment brought earnings before taxes of $854 million, down from $1.75 billion last year. The segment’s earnings before taxes accounted for 73% of revenues, down from 86% last year.

IP issues continue for Qualcomm

The chip maker said the actions of Apple’s contracted suppliers weighed on its third quarter results. They didn’t fully report and didn’t pay royalties on Qualcomm’s patents as used in Apple products. Qualcomm also said another dispute with another licensee that didn’t report or pay patent licensing royalties had a negative impact on its third quarter, which ended June 25. The chip maker expects all these licensees to keep holding back royalty payments until the disputes are resolved.

The company also shelled out $940 million to BlackBerry in connection with IP licensing as a result of an arbitration ruling in favor of the Canadian firm. Additionally, Qualcomm had to pay $927 million in fines to the Korea Free Trade Commission.

Qualcomm issues Q4 guidance

Qualcomm also provided guidance for the fourth quarter, which exclude QTL revenues from sales of Apple products by the iPhone maker’s suppliers and the other licensee the company is in dispute with.