Fresh Qualcomm forecasts regarding revenues from sales over the Christmas period was significantly below analysts ‘ expectations due to the loss of orders from Apple. Shares of us chip supplier, fell 3.4 %. Qualcomm also predicts that the profit in the first quarter of the reporting year 2019 will be above analysts ‘ estimates, but this is largely due to one-time tax benefit in the amount of about 45 cents a share.
Qualcomm is the world’s largest supplier of chips for smartphones, but the company’s business deteriorated due to the slowdown in growth of the industry in General and the loss of a major customer in the face of Apple. The company also encountered difficulties in terms of licensing patents, when it gets a share from sales of smartphones: the problems observed by the Antimonopoly regulatory authorities and from customers, including Apple, which is suing Qualcomm.
Apple, recall, uses all of the iPhone XS, Max XS and XR only modems Intel. Earlier this summer, the Qualcomm has warned its shareholders that cupertina the company is likely to make this step, but the impact of the loss of Apple orders were stronger than expected on wall street.
The first reporting quarter of Qualcomm, which ends in December, will bring, according to company forecasts, a $4.5–5.3 billion of revenue and adjusted profit of $1.05 and$1,15 per share. According to IBES, analysts had expected profit of $5,57 billion and a profit of 95 cents a share.
Qualcomm CFO George Davis (George Davis) told Reuters that about half of purchases chips from Apple, as a rule, occurred during the Christmas quarter. According to him, analysts wall street apparently believed that the loss of Apple orders more evenly distributed for the whole year. “We will deliver for the quarter by 50 million chips less, because of the lack of orders from Apple. It affects the income,” he said.
“Net income is not catastrophic, — the analyst Summit Insights Kingi Chan (Chan Kinngai). — I think that Qualcomm can start a new phase of growth, with good potential for development of the 5G market and increasing the supply of chips for related industries like cars”.
Reuters, citing its informants, reports that Apple is not doing Qualcomm talks at any level on the settlement of litigation. George Davis said inside and outside the company a lot of attention attracted to discussion of problems with the licensees, but did not comment on talks with Apple.
Qualcomm is trying to compensate for difficulties with Apple and lawsuits, signed a new patent deal with customers, allowing you to pay less for the license. The company, in particular, have reached new agreements with large clients like Samsung Electronics. Also to compensate for the loss of Apple orders intended to strengthen ties with Qualcomm Chinese manufacturers like Xiaomi, Oppo, Vivo and OnePlus. Mr. Davis stresses that these companies increasingly produce smartphones of higher class that use the chips Qualcomm Snapdragon series 700 and 800.
Generally, during the last fourth quarter (ended in September) Qualcomm revenues fell to $5.8 billion, which, however, exceeded the forecasts of wall street $5,52 billion And losses totaled $493 million (35 cents per share) against a profit of $168 million a year earlier.