The semiconductor giant’s licensing business took a hit as its dispute with Apple continues, but its core business saw decent growth.
Qualcomm published its fourth quarter financial results on Wednesday, beating market expectations.
The semiconductor giant reported non-GAAP earnings per share of 92 cents on GAAP revenue of $5.96 billion. A year prior, the company reported adjusted earnings of $1.28 per share on revenue of $6.18 billion.
Wall Street was looking for adjusted earnings of 81 cents per share on revenue of $5.8 billion.
For the full fiscal year 2017, Qualcomm reported non-GAAP earnings per share of $4.28 on GAAP revenue of $22.3 billion.
Qualcomm’s licensing business took a hit as a result of its ongoing legal battle with Apple and other licensees, but its core business saw solid growth.
“Our fourth quarter and fiscal 2017 results reflect continued product leadership and profitability improvement in our semiconductor business, including strength in adjacent opportunities outside mobile,” CEO Steve Mollenkopf said in a statement. “We continue to see strong growth trends for global 3G/4G device shipments and are focused on protecting the established value of our technologies and inventions. We are leading the industry to 5G and are well positioned with our product and technology leadership to continue our expansion into many exciting new product categories, such as automotive, mobile computing, networking and the Internet of Things.”
For the second quarter in a row, Qualcomm said its financial results “were negatively impacted as a result of actions taken by Apple and its contract manufacturers as well as the previously disclosed dispute with another licensee, who underpaid royalties due in the second quarter of fiscal 2017 and did not report or pay royalties due in the third and fourth quarter of fiscal 2017.”
Qualcomm added, “We expect these licensees will continue to take such actions in the future until the respective disputes are resolved.”
Qualcomm’s epic struggle with Apple started in January, when Apple filed a lawsuit that accused the semiconductor giant of overcharging for chips. Earlier this week, the Wall Street Journal reported that Apple is designing its iPhone and iPads for next year without any Qualcomm components.
The Apple dispute has put significant pressure on Qualcomm Technology Licensing (QTL), Qualcomm’s licensing division, which accounts for a significant portion of Qualcomm’s earnings. The company’s other business segment, QCT (Qualcomm CDA Technologies), accounts for most of its revenue.
The QCT segment in Q4 saw solid growth: QCT revenues for the quarter came to $4.65 billion, a 13 percent year-over-year increase. The segment generated $973 million in earnings before taxes for the quarter, a 42 percent year-over-year increase.
Still, QTL revenues declined 36 percent year-over-year, totaling $1.21 billion. The segment generated $829 million in earnings before taxes, a 48 percent year-over-year decrease.
Meanwhile, Qualcomm on Wednesday that its major deal to acquire NXP Semiconductor, which will help it move into IOT and automotive, may not close until early 2018. “We continue to work to close by the end of calendar 2017,” the company said.
