Qualcomm 3Q Net Falls 6% on Higher R&D Expenses
Qualcomm's fiscal third-quarter net income fell 6% on an increase in research and development expenses for integrated circuit products.
But shares rose 17.6% to $52.90 in after-hours trading as the company also settled its patent-licensing dispute with cellphone giant Nokia.
For the quarter ended June 29, the cellphone-chip maker reported net income of $748 million, or 45 cents a share, down from $798 million, or 47 cents a share, a year earlier.
The latest results included 11 cents in stock-based compensation, research and development, and other charges. Excluding items, per-share earnings were unchanged at 55 cents.
Revenue rose 19% to $2.76 billion from $2.33 billion.
Last month, Qualcomm raised its guidance to earnings of 54 cents to 55 cents a share on revenue slightly above the high end of a range of $2.5 billion to $2.7 billion. Analysts' mean estimates were for per-share earnings of 55 cents on revenue of $2.71 billion, according to a poll by Thomson Reuters.
"We are pleased to report another strong quarter as the migration to 3G-enabled products continues to accelerate," Chief Executive Paul E. Jacobs said.
Qualcomm said it will update its guidance in a conference call Thursday.
Qualcomm, which gets more than half of its profit from patent fees, resolved its patent-licensing litigation with Nokia earlier Wednesday. Under the terms of the 15-year agreement, Nokia will make an upfront payment and ongoing royalties to Qualcomm in exchange for a license to use technology covered by Qualcomm's patents in its mobile devices and infrastructure equipment.
Nokia, which says it has paid more than $1 billion in royalties to Qualcomm since the 1990s, stopped paying royalties in April 2007, when an agreement between the two companies expired. The companies had been squabbling in court since that time.
-By Lauren Pollock and Kathy Shwiff, Dow Jones Newswires; 201-938-5975; kathy.shwiff@dowjones.com
(END) Dow Jones Newswires
Posted to the site on 24th July 2008