CGTN | 31-Jul-2020
Qualcomm jumped as much as 13 percent after hours on Wednesday as the company’s fiscal third-quarter earnings beat expectations and it announced a long-term patent agreement with Huawei.
The company reported third-quarter earnings of 4.89 billion U.S. dollars, exceeding the estimate of 4.8 billion U.S. dollars by Reuters analysts. Qualcomm, which sells smartphone chips and licenses critical patents on 5G technology, announced it entered into a long-term patent agreement with Huawei this month, adding that it expects to record 1.8 billion U.S. dollars in settlement payments from the tech giant in the fiscal quarter ending in September.
The company said it expected 5G handset shipments would be 15 percent lower year over year in the fourth fiscal quarter, citing a launch delay from one of its customers. It expects to ship between 175 million and 225 million 5G handsets this year. Various headwinds are facing the semiconductor giant, including tensions raging between the world’s two largest economies and a pandemic. China is one of the most important markets for Qualcomm, but uncertainties in trade policies have prompted Chinese tech companies to turn to domestic companies for chips they used to import.
Notably, Huawei’s chip subsidiary HiSilicon ranked 10th for global semiconductor sales in the first quarter of 2020. This is the first time that a Chinese company has entered the top 10 ranking.
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