As of June 24, the third quarter of fiscal year 2018, according to US GAAP, the company's revenue was 5.6 billion US dollars, up 4% from the 5.4 billion US dollars in the same period last year, higher than analysts' expectations of 5.19 billion US dollars; net profit It was $1.2 billion, up 41% from $900 million in the same period last year; diluted earnings per share were $0.82, compared to $0.58 in the same period last year, a year-on-year increase of 41%.
Most of Qualcomm's revenue comes from the CDMA technology division that produces device chips such as mobile phones. In the third quarter, the division's revenue was $4.09 billion, lower than FactSet analysts' expectations of $4.11 billion.
Qualcomm CEO George Davis said in the earnings conference that the department's performance reflects the 'strong demand' of Chinese equipment manufacturers and Apple's 'demand is falling'.
Qualcomm’s patent business revenue was $1.47 billion, which was higher than market expectations of $976 million.
In the third quarter, Qualcomm announced the creation of Qualcomm AI Research and officially released the Opteron 850 chip designed for Windows10.
Qualcomm expects revenue for the next quarter to be $5.1 billion to $5.9 billion, not in accordance with US GAAP, and diluted earnings per share are expected to be 75 cents to 85 cents. Thomson Reuters data shows that analysts expect Revenue for the quarter was $5.45 billion, and diluted earnings per share were 76 cents.
Davis said in a conference call: 'Apple intends to use only our competitor's modem in the new iPhone. We will continue to supply modems for Apple's old devices.'
In after-hours trading, Qualcomm shares rose more than 6% to $63.5, and the current increase is 5.6%. So far this year, its share price has fallen by 8.4%. Currently, NXP shares fell about 3.7% to 98.37 US dollars since the beginning of 2018. The stock price fell nearly 15%.
Qualcomm said in its earnings report today that it will abandon the acquisition of NXP if there is no substantial progress in China's approval before the 25th.
In October 2016, Qualcomm announced that it will spend $44 billion to acquire NXP, the largest transaction in the history of the semiconductor industry. In the context of slowing growth in demand for mobile phones, Qualcomm will have a new market if the transaction is successful.
The deal has also become complicated due to the trade impasse between China and the United States and conflicts over issues such as technology and patent ownership.
Qualcomm claims that if it has not passed the approval of Chinese regulators before 23:59 EST on the 25th (Beijing time at 11:59 on the 26th), it will cancel the deal. So far, China has not made any decision. The transaction needs to be approved by nine countries around the world, and China is the last country that has not expressed its position.
Last year, the Chinese market accounted for nearly two-thirds of Qualcomm's global revenue, so the deal requires Chinese approval.
Qualcomm also said today that if the transaction fails, it will buy back 30 billion US dollars of stock. In order to appease shareholders, Qualcomm promised compensation measures that would be taken if the transaction failed earlier this year. This stock repurchase initiative is the latest by Qualcomm. detail.
If the transaction is cancelled, Qualcomm will pay NXP's $2 billion break-up fee. The current mobile phone market is saturated, and Qualcomm will continue to find other ways to expand its chip sales. NXP is a major supplier of automotive chips.
A person familiar with the matter said that whether the deal will be approved at the last minute is still half the probability.
Another person familiar with the matter said that it seems unlikely that Qualcomm will get China’s approval on the 25th, and it is preparing to pay NXP’s breakup fee.