Today, Qualcomm Inc forecasted the current-quarter revenue largely below the targets that were set by Wall Street, excluding a settlement payment from Apple Inc. It sent the shares of the company down by approximately 3 percent in after-hours trading.
The gloomy forecast comes a day after Apple said that sales in China, the largest smartphones market in the world, were stabilizing, boosted by price cuts and lower taxes.
According to IBES data from Refinitiv, Qualcomm estimated adjusted revenue amounting between $4.7 billion and $5.5 billion for its third quarter ending June 30, the mid-point of which drops below the average estimate of analysts of $5.30 billion.
According to data firm FactSet, the biggest supplier of mobile phone chips in the world also forecast third-quarter revenue for its patent licensing business between $1.23 billion and $1.33 billion as compared with the estimates of analysts of $1.01 billion.
The company said that the forecast for its third quarter included an estimated revenue amounting to $4.5 billion to $4.7 billion from the settlement.
Qualcomm had said that the settlement is anticipated to generate $2 per share in additional earnings.
Net income that is attributable to Qualcomm increased to $663 million, or 55 cents per share, in the quarter ended March 31, from $330 million, or 22 cents per share, a year earlier.
Revenue dropped to $4.88 billion, however, it beat the estimates of analysts of $4.80 billion.
Earlier, Qualcomm Inc. said that it would receive at least $4.5 billion from Apple Inc. as part of a legal settlement between the firms that ended the more than two years of wrangling over the patent-licensing fees of the chip maker.