Apr 28, 2017

Qualcomm cuts earnings forecast after Apple withholds more royalty payments

Ina Fried, author of Login

Kenny Louie / Flickr CC

Qualcomm warned Friday that its quarterly earnings will be further dented as Apple has continued to withhold royalty payments amid an ongoing legal dispute. Apple had already withheld $1 billion in payments, money it believes it was owed by Qualcomm.

The disclosure Friday was that Apple, through its suppliers, is holding back further payments beyond the $1 billion that is the center of Apple's lawsuit against Qualcomm.

What it means: Qualcomm says it is now forecasting earnings of per-share earnings of 75 cents to 85 cents down from the 90 cents to $1.15 it predicted just nine days ago. That forecast imagined a range of scenarios around Apple, but Qualcomm noted the earlier outlook did not include the prospect of Apple withholding payments entirely.

What's next: As the two battle it out in court things could get even dicier. Apple still depends on Qualcomm's modems, especially for the Sprint and Verizon iPhones, for which there is no ready alternative. Qualcomm has thus far downplayed the option of halting chip supply, with CEO Steve Mollenkopf saying on last week's earnings call: "We expect to continue to be an important supplier to Apple now and into the future."

Go deeper

Trump says he will campaign against Lisa Murkowski after her support for Mattis

Trump with Barr and Meadows outside St. John's Episcopal church in Washington, D.C. on June 1. Photo: Brendan Smialowski/AFP via Getty Images

President Trump tweeted on Thursday that he would endorse "any candidate" with a pulse who runs against Sen. Lisa Murkowski (R-Alaska).

Driving the news: Murkowski said on Thursday that she supported former defense secretary James Mattis' condemnation of Trump over his response to protests in the wake of George Floyd's killing. She described Mattis' statement as "true, honest, necessary and overdue," Politico's Andrew Desiderio reports.

8 hours ago - World

The president vs. the Pentagon

Trump visits Mattis and the Pentagon in 2018. Photo: Brendan Smialowski/AFP via Getty

Over the course of just a few hours, President Trump was rebuffed by the Secretary of Defense over his call for troops in the streets and accused by James Mattis, his former Pentagon chief, of trampling the Constitution for political gain.

Why it matters: Current and former leaders of the U.S. military are drawing a line over Trump's demand for a militarized response to the protests and unrest that have swept the country over the killing of George Floyd by police.

New York Times says Tom Cotton op-ed did not meet standards

Photo: Avalon/Universal Images Group via Getty Images)

A New York Times spokesperson said in a statement Thursday that the paper will be changing its editorial board processes after a Wednesday op-ed by Sen. Tom Cotton (R-Ark.), which called for President Trump to "send in the troops" in order to quell violent protests, failed to meet its standards.

Why it matters: The shift comes after Times employees began a coordinated movement on social media on Wednesday and Thursday that argued that publishing the op-ed put black staff in danger. Cotton wrote that Trump should invoke the Insurrection Act in order to deploy the U.S. military against rioters that have overwhelmed police forces in cities across the country.