Qualcomm Inc. reported second-quarter earnings of $1.34 per share on April 19 — well above the $1.25 that it put at the high end of its guidance in late January, and a 29 percent improvement to its earnings from the same quarter one year ago. Revenue was $6.0 billion.
Those numbers exclude one-time occurrences and are therefore not GAAP numbers (that is, presented according to generally accepted accounting principles). However, those are the numbers that securities analysts follow closely. Twenty-two analysts surveyed by Thomson Reuters were collectively looking for $1.19 per share.
Qualcomm reported GAAP net income of $749 million — or 50 cents per share — on revenue of $5.02 billion. An arbitrator’s award to BlackBerry Inc. (Nasdaq: BBRY), announced in mid-April, reduced the latter number by $974 million, Qualcomm said.
In the second quarter of last year, the company reported net income of $1.16 billion on revenue of $5.55 billion.
Management offered an optimistic view of the future, but hanging over the sunny predictions were the court fight with Apple Inc. (Nasdaq: AAPL) and antitrust challenges in several countries.
“Apple’s contract manufacturers reported, but underpaid, royalties in the second quarter of fiscal 2017,” Qualcomm said in a statement. “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 currently in dispute.”
That agreement expired on Dec. 31.
“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 continued. Primarily because of this, the company said it is making its fiscal third quarter earnings per share guidance “wider than our typical practice.
“We have considered a variety of scenarios within this range, but have not included a scenario where no payment is made by the contract manufacturers. We will update our guidance if we subsequently learn of any action that would take us outside of the announced guidance range.”
By the end of the current, third quarter, the business said it expects a non-GAAP earnings per share in the range of 90 cents to $1.15, and revenue of $5.3 billion to $6.1 billion.