Chip manufacturer Qualcomm has reported quarterly revenue and profits that beat analysts’ estimates. Despite on going litigation worries – primarily with Apple – the chipmaker exceeded expectations in its quarterly report.
The largest manufacturer of chips from tablets and mobile devices, Qualcomm forecast adjusted profit of $1.15 per share and revenue of $6.1 billion. That’s significantly more than a profit of $1.09 cent per share and revenue of $5.9 billion forecast by industry analysts before the report.
In total, revenue fell by 9.6 per cent in the three months until the end of March, but that is partly to do with a $974 million reduction to revenue related to an arbitration agreement over a royalties dispute with BlackBerry.
Although unclear at the moment, ‘catch-up’ payments from customers are largely expected to have attributed to the better-than-expected financial reports. The company has also said that there has been an increased demand for its Snapdragon mobile chips, especially in China, that has boosted revenue by 10 per cent.
The licensing side of the business also recorded strong figures, with a 5 per cent revenue rise to $2.25 billion. In total this side of the business contributed to about 85 per cent of the company’s earning before tax in 2016.
Last week, Qualcomm slapped Apple with a counter-lawsuit after the iPhone maker took the chip manufacturer to court for breaching an agreement between the two firms. Apple accused the chip manufacturer of overcharging them and refusing to pay a whopping $1 billion in promised rebates. However, the legal wrangling has taken a sudden U-turn, with Qualcomm counter-suing Apple. The chip manufacturer alleged that Apple has ‘encouraged regulatory attacks’ on its business by making ‘false statements’ around the world.
Despite the legal battle, Qualcomm Chief Executive Steve Mollenkopf said that the company expected to continue to be an ‘important supplier to Apple now and into the future’.