Qualcomm revenue drops 17% to $4.81 billion

Qualcomm, the world’s biggest supplier of mobile phone chips, said revenue in the fourth-quarter ended Sept. 29 fell about 17 percent to $4.81 billion.
Qualcomm 5G chipsetQualcomm said that for the fiscal fourth quarter ended Sept. 29, revenue in its licensing segment was $1.16 billion.

Qualcomm said it forecasts current-quarter profit above Wall Street expectations, as its licensing segment benefits from a deal with Apple.

Qualcomm derives most of its profits from a business segment that invents technologies and licenses them. The company forecast between $1.3 billion and $1.5 billion in revenue for that segment for its fiscal first quarter.

The licensing business drove the adjusted profit forecast with a midpoint of 85 cents per share.

Qualcomm CEO Steve Mollenkopf said that the company has won deals to supply 230 device designs with 5G chips, up from 150 a quarter ago.

“We’re continuing to see strength in the licensing business, particularly after we’ve added in the deal we signed this year with Apple, and we’re on the front end of the 5G transition, which will impact our product business,” Mollenkopf said.

The chip company has resolved license disputes with major customers such as Samsung Electronics and Apple, but remains in a license dispute with Huawei. “Although negotiations continue, we have not reached a final agreement with Huawei,” Qualcomm said on Wednesday.

Qualcomm said it expects between 1.75 billion and 1.85 billion smart devices with modem chips, including 175 million to 225 million 5G handsets, to be sold in 2020. Because Qualcomm collects license fees on devices that use cellular connections to wireless data networks, a greater number of devices sold often results in higher revenue and profits.

The results come a week after Apple calmed Wall Street nerves with improved sales in China, the world’s largest smartphone market, and follow strong earnings from chipmaker Intel last month, Reuters reported.