Qualcomm shares dip despite upbeat earnings, Samsung deal
Qualcomm reported a dip in quarterly earnings as it continues to grapple with regulatory issues and customer disputes. However, profits were ahead of what the company had said to expect.
Separately, the company said it had reached new deals with Samsung, one of its largest customers.
Why it matters: The chipmaker is in the midst of a hostile takeover bid from Broadcom, was just fined by European antitrust regulators and remains in a bitter legal battle with Apple.
Qualcomm posted revenue of $6.1 billion, up 1% from the prior year, while per-share earnings were 98 cents, down 18% from the prior year. Analysts were expecting per-share earnings of around 90 cents, according to Zacks.
"Qualcomm had a good quarter driven by stronger wireless performance," said analyst Pat Moorhead of, Moor Insights & Strategy. "The quarter was good even though Apple isn’t paying royalties, a testament to the company’s diversification."
He also praised the new agreements with Samsung. "The Samsung announcement is important as it lowers Qualcomm uncertainty which has weighed on the stock for a year and contradicts many of Broadcom’s claims of a broken model," Moorhead said.
Nonetheless, shares were trading down fractionally in after-hours trading following the report.