(Reuters) - Qualcomm Inc QCOM.O
on Wednesday forecast fourth-quarter revenue largely above Wall Street
expectations, powered by sales of its chips used in 5G devices and
reaching a settlement with Huawei Technologies Co Ltd [HWT.UL].
Shares
of the company were up as much as 13% in extended trading despite a
forecast for fourth-quarter chip revenue slightly lower than analysts
expected because of a delayed “flagship phone launch” analyst believe is
Apple’s new iPhones.
The company
also said it resolved a licensing dispute with Huawei, which will pay
Qualcomm a catch-up payment of $1.8 billion in the fiscal fourth
quarter. While Huawei is still barred from buying Qualcomm’s chips under
U.S. regulations, it has now resumed paying licensing fees for wireless
technology, Qualcomm said.
After resolving a bruising legal battle with iPhone maker Apple Inc AAPL.O
last year, Qualcomm entered 2020 with a deal to resume selling chips to
Apple and predicting revenue growth from 5G devices, which fetch higher
chip revenue per phone for the company. Qualcomm forecast
fourth-quarter chip shipments with a midpoint of 155 million units,
slightly below expectations of 159 million units, according to FactSet
data.
Chief
Financial Officer Akash Palkhiwala told Reuters in an interview that
Qualcomm expected to make up some of those sales in the fiscal first
quarter.
“We’re
seeing a partial impact from the delay of a flagship phone launch. And
so what we’ve seen is a slight delay that pushes some of the units out
from the September quarter to the December quarter for us,” he said.
Qualcomm executives did not name the customer, but analyst widely believe it to be Apple.
While
Qualcomm has long supplied processors and modems to help phones connect
to wireless data networks, it has pushed into also selling
radio-frequency chips to help phone makers handle the more complex
signals involved in 5G networks.
Palkhiwala
said Qualcomm expected to win sales with all major smartphone makers,
including the customer facing a delayed flagship launch in the fiscal
fourth quarter, though he did not name specific customers. “Suffice to
say, I think going forward we expect to be selling to all of them,” he
said.