QUALCOMM, Inc. (NASDAQ:QCOM) has surprised the market yet again by delivering higher than expected results for the second quarter. The company also offered its outlook for the third quarter that is in line with its tradition. In any case, the chip-maker has diverted investors’ attention from the lawsuits it has been facing from companies like Apple Inc. (NASDAQ:AAPL) and countries such as Korea.
Despite the challenging market conditions, QUALCOMM indicated that its focus on fresh markets like connected devices and automotive have lifted its revenue in the second quarter. This has effectively helped to remove at least to some extent any concerns about the growth due to the legal issues in respect of licensing business and the amount of royalties.
The chipmaker indicated that Apple’s contract manufacturers have not paid full the royalties in the second quarter. However, the company claimed that it did not impact its revenues unfavorably as the contract manufacturers acknowledged that the amounts are due and that it was due to pending payment to Apple under the Cooperation Agreement, which is in dispute now.
While releasing results, QUALCOMM’s CEO, Steve Mollenkopf, commented, “We delivered strong results this quarter, with healthy year-over-year growth across our QTL licensing and QCT semiconductor businesses, especially in the important automotive, networking and IoT growth areas. Our performance reflects continued execution of our strategy to lead the mobile industry across a broad set of technologies, including advanced LTE and 5G, and accelerate our growth opportunities beyond mobile into automotive, IoT, security and networking.”
The company believes that it is well placed to address a big set of opportunities ahead of it than in the past by pointing out its pending acquisition of NXP and the leading technology roadmap. It would continue to invest in R&D to fuel the edge of mobile computing, as well as, connectivity with a focus on generating the best returns.
QUALCOMM reported earnings of $1.34 a share on revenue of $6 billion for the second quarter. This exceeded the Street analysts’ estimates of $1.20 a share and $5.89 billion revenue. Going forward, the company sees its adjusted EPS between $0.90 and $1.15 on revenue fall of 12 percent to an increase of one percent. Street is looking for an EPS of $1.09 and revenue of $5.94 billion.
Following the beat results, the stock advanced 2.39 percent in extended hours trading on Wednesday and the trend could continue on Thursday.