Qualcomm posts better than expected quarterly earnings; Shares rise

Qualcomm reported that its revenues from QCT segment surged 10% to $3.68 billion from $$3.34 billion a year ago.

Specifically, Qualcomm says Apple's suppliers have "withheld ~$1 billion from their payments" over royalties for sales activity in the December quarter alone.

Qualcomm did not provide full-year estimates, but analysts' consensus full-year estimates call for EPS of $4.64 and revenues of $23.8 billion.

For the third quarter, Qualcomm expected to deliver adjusted earnings between $0.90 and $1.15 per share, a decline of 1% to 22%.

Analysts on average were expecting a profit of $1.09 per share and revenue of $5.94 billion, according to Thomson Reuters I/B/E/S.

eBay's net income fell to $538 million from $550 million in last year's first quarter.

Qualcomm said on Wednesday that Apple's contract manufacturers including Foxconn paid royalties, although they withheld around $1 billion from the undisclosed total amount due. Its QTL revenues increased 5% from $2.14 billion to $2.25 billion.

Qualcomm's market share in China is expected to increase to 65 percent this year from 50 percent in 2016, with share gains in OPPO, Vivo, Xiaomi and Meizu, Rosenblatt Securities analyst Jun Zhang wrote in a note. Its shares ended the day at $52.61 but rose to $53.80 in after-market trading.

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.

Looking ahead, Qualcomm provided a wider than usual guidance range for the current quarter because of the uncertainty.

Steve Mollenkopf, Qualcomm CEO, speaks during his keynote address at CES in Las Vegas.Reuters/Rick Wilking (Reuters) - Qualcomm Inc, the largest maker of chips used in smartphones, reported higher-than-expected quarterly adjusted profit and revenue, helping allay concerns about the company's patent-licensing business. The iPhone maker has accused Qualcomm of overcharging for its chips and withholding almost $1 billion in contractual payments. In addition to being sued by Apple, Qualcomm is facing an FTC complaint accusing it of anti-competitive business practices.

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now. and Qualcomm wasn't one of them! However, our revenues were not negatively impacted as the contract manufacturers acknowledged the amounts are due and the underpayment was equal to the amounts that Qualcomm has not paid Apple under our Cooperation Agreement that are now in dispute.

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