Qualcomm said uncertainty over payments related to its dispute with Apple could have a “negative impact on our financial results”, as its fiscal Q2 earnings were hit by a settlement with BlackBerry.
The company said its Q2 revenue was not impacted by the Apple action, because although the iPhone maker’s contract manufacturers reported – but underpaid – royalties, the companies did recognise the amounts were due and the underpayment was equal to a sum Qualcomm has not paid to Apple under the disputed Cooperation Agreement.
“It is not clear whether Apple’s contract manufacturers will underpay royalties owed under their contracts with us in the third quarter of fiscal 2017, which could have a negative impact on our financial results,” Qualcomm stated.
Its figures for the quarter ending 26 March 2017 included a $974 million reduction in revenue related to the BlackBerry arbitration decision. The dispute related to overpaid royalties and how Qualcomm’s price caps were applied to sums prepaid under the terms of the licensing agreement.
It was noted the contract provision only applied to BlackBerry and, therefore, the decision does not apply to other partners.
The company reported a $749 million profit for the period compared with $1.2 billion in the prior year, on revenue of $5 billion, down from $5.6 billion. Licensing revenue decreased to $1.3 billion from $2.2 billion.
Steve Mollenkopf, CEO of Qualcomm, said: “We will continue to protect the value of our technologies, which enables today’s robust mobile communications ecosystem, and invest in R&D that will drive the leading edge of mobile computing and connectivity for decades to come – focusing on areas where our technologies will have the most impact and generate the best returns.”
Qualcomm also said a deal to acquire NXP Semiconductors is expected to close by the end of calendar 2017. Earlier this month, Qualcomm said it would extend the period of its tender for NXP shares (not for the first time), against a backdrop of slow acceptances, although it said today the deal is still on-track.
“With our leading technology roadmap and pending acquisition of NXP, we are positioned to address a larger set of opportunities ahead than any other time in our history,” Mollenkopf said.