- Qualcomm stock shot up 6% in extended trading after the company beat revenue and earnings estimates.
- The chipmaker said the strong profit was primarily due to its technology licensing segment.
Qualcomm stock jumped 6% in extended trading on Wednesday, after the chipmaker reported better-than-expected earnings and revenue.
Qualcomm reported adjusted earnings per share of 78 cents, topping the average estimate of 71 cents, according to
Refinitiv. Revenue of $4.8 billion also beat analyst expectations of $4.7 billion.
The company attributed its strong profit primarily to its licensing segment, which makes money from patents and other licensing arrangements. The Qualcomm Technology Licensing business generated $1.15 billion in revenue.
Qualcomm's beat wraps up a fiscal year in which the company settled a legal battle with customer Apple and entered into a royalty agreement with Huawei over wireless patents and chips. Payments stemming from the settlement and agreement have contributed to its licensing business.
"In addition, our QTL results for the third and fourth quarter of fiscal 2019 included royalties from Apple and its contract manufacturers for sales made in the June 2019 and September 2019 quarter, respectively," Qualcomm said in its statement.
The company said fourth quarter and fiscal 2018 revenue included $100 million and $600 million, respectively, from "an interim agreement with Huawei."
Qualcomm provided a forecast for the first quarter that's about in line with expectations, projecting revenue of $4.4 billion to $5.2 billion, compared to the $4.8 billion estimate from Refinitiv.
The company estimates that 175 million to 225 million 5G handsets could ship next year. Qualcomm stands to make money on those handsets because they include 5G modems, and it has several important patents that manufacturers need to license for the devices.
Separately, Qualcomm named Akash Palkhiwala as its chief financial officer. He's Qualcomm's third CFO this year, following David Wise, who retired in August, and George Davis, who left to become CFO of Intel.