Qualcomm’s future revenues could take a hit in the range of $66 million to $99 million, according to the company’s financial statements. That is, if an ongoing quarrel between Qualcomm Inc. and Nokia Corp. over licensing agreements pertaining to Qualcomm’s intellectual property isn’t resolved.
According to documents Qualcomm filed with federal regulators Nov. 2, the estimated range for fiscal 2007 diluted earnings per share is $1.76 to $1.81.
The pro-forma earnings per share do not reflect a potential loss of approximately 4 to 6 cents , a possible loss that would occur during the fourth quarter of 2007 if negotiations with Nokia to renew licensing agreements fail.
Qualcomm said in a release that, “Nokia has publicly stated that they intend to continue to use our patents but not pay royalties after the expiration of their rights under those patents on April 9, 2007,” which falls during Qualcomm’s third quarter.
Qualcomm also mentioned that its rights to sell integrated circuits under Nokia’s patents would cease as of the same date.
Licensing revenues from Qualcomm’s third quarter would be reported in its fourth-quarter results, according to London-based Computer Business Review Online, which reports that patent licensees pay one quarter in arrears.
As of Nov. 6, the San Diego-based chip maker has approximately 1.6 billion shares outstanding. With the potential loss of 4 to 6 cents per diluted share, that comes to between a $66 million to $99 million loss in licensing revenue for the fourth quarter.
Qualcomm’s expansive portfolio of wireless technology patents has come under fire by the world’s largest handset maker, Nokia, in the past and both companies are involved in multiple lawsuits against each other.
Qualcomm is traded on the Nasdaq under the ticker symbol QCOM and closed Nov. 6 at $36.14, down 33 cents from the previous session’s close.
, Andy Killion