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Qualcomm's fiscal Q3 adjusted EPS falls 20% YOY; revenue misses estimates

QUALCOMM Inc.'s adjusted EPS in the fiscal third quarter surpassed analysts' estimates despite a year-over-year decline, while its revenue dropped and came in below expectations amid slower demand for 4G devices.

The chipmaker said its non-GAAP EPS for the quarter ended June 30 was 80 cents, down 20% from $1 a year ago, but higher than the S&P Global Market Intelligence consensus normalized EPS estimate of 77 cents.

Adjusted net income totaled $982.0 million, a decline of 34.1% from $1.49 billion in the prior-year period.

Non-GAAP revenue decreased 12.7% on an annual basis to $4.89 billion from $5.61 billion, missing the S&P Global Market Intelligence consensus estimate of $5.12 billion.

Qualcomm CEO Steve Mollenkopf said the company faced "slower demand for 4G devices as the market prepares for the global transition to 5G."

The chipmaker's non-GAAP results excluded licensing revenues of $4.7 billion from a settlement agreement with Apple Inc. and its contract manufacturers.

Including that revenue boost, quarterly GAAP net income grew 78.8% year over year to $2.15 billion, or $1.75 per share, from $1.20 billion, or 81 cents per share. GAAP revenue climbed 72.8% on an annual basis to $9.64 billion from $5.58 billion.

Qualcomm said it expects non-GAAP EPS between 65 cents and 75 cents in the fiscal fourth quarter. On a GAAP basis, the company expects EPS in the range of 38 cents to 48 cents. Revenue for the quarter is projected to be in the range of $4.3 billion to $5.1 billion.

The S&P Global Market Intelligence consensus normalized EPS estimate for the fiscal fourth quarter is $1.10.

The forecasts exclude royalty fee payments from Huawei Technologies Co. Ltd. under an interim licensing agreement that ended in the fiscal third quarter.

Qualcomm said negotiations on a final agreement with Huawei continue. "If no agreement is reached, Huawei may not make any other payments or may not make full payments under the underlying license agreement," the company noted.

The company's shares extended losses in after-hours trading, falling more than 4% to $69.65 after ending the day down 2.21%.