Apple, regulatory disputes case shadow over Qualcomm’s first quarter results

Like so many other mobile device makers, Apple has utilized our technology as the foundation for becoming the most profitable smartphone supplier in the world.

Revenue in the licensing business (Qualcomm Technology Licensing (QTL)), which sells sells applications processors and cellular baseband devices, grew 13% year over year to $1.8 billion, while QCT revenue, which exists to monetize Qualcomm enormous IP portfolio, came in at $4.1 billion.

The company said on Wednesday the latest quarter included an $868 million charge related to the KFTC investigation. (NASDAQ:QCOM) traded 41.71 Million shares and was closed at $55.00 per share. But that hasn’t changed Qualcomm’s business stand with Apple. Apple claims Qualcomm withheld $1 billion in rebates after it discovered Apple was cooperating with regulators in the USA and South Korea over royalties and alleged price gouging.

“Qualcomm led the industry in producing innovations that provide or support nearly every aspect of your smartphone’s capability”, Aberle said. It fell short of earnings estimates on 1 occasions, and it has met expectations 0 time.

For the quarter that ended December 31, it reported revenue of $6 billion and net income of $700 million, or 46 cents a share, under Generally Accepted Accounting Principles.

Verizon Communications Inc. (NYSE:VZ)’s earnings per share has been growing at a 37.2 percent rate over the past 5 year when average revenue increase was noted as 4.3 percent.

Excluding items, Qualcomm earned $1.19 per share, just above the average analyst estimate of $1.18. The chip maker faces legal challenges across the globe.

Currently, the analyst consensus on Qualcomm Inc is Moderate Buy and the average price target is $71.55, representing a 25.7% upside.

On Wednesday, news broke that Apple also has filed two lawsuits against Qualcomm in China. The royalties of 2.9% per handset are said to be 5-10 times higher than licensing deals with other large mobile patents holders such as Ericsson and Nokia. Adjusted EPS is forecast in a range of $1.15 to $1.25, compared with an actual total of $1.04 previous year. The Cupertino giant has also filed a $1bn suit in a California District Court on charges that Qualcomm had for years been gouging it on royalties and withholding payments as retaliation for Apple’s participation in a South Korean antitrust probe. The corporation has a market cap of US$204.44 Billion. Then, on January 25, the same day as Qualcomm’s earnings call, news broke of two additional lawsuits Apple filed in Chinese court.

That compares to consensus for $5.93 billion and $1.19 per share. See which 3 stocks are most likely to make moves following their insider activities.

In December 2015, the European Commission filed formal complaints against Qualcomm alleging that Qualcomm illegally paid a major customer to exclusively use its baseband processors and that it sold its baseband processors below cost with the aim of forcing a competitor out of the market.