Summary
Qualcomm Inc. reported a net loss of $5.95 billion for the three months ended December 24, 2017, a significant decline from a net income of $682 million in the prior year's comparable period. This loss was largely driven by a substantial income tax expense of $5.93 billion, primarily due to the U.S. Tax Cuts and Jobs Act, which included a one-time repatriation tax (Toll Charge) and remeasurement of deferred tax assets. Excluding this tax impact, the company's operating performance showed mixed results, with equipment and services revenue increasing by 14% year-over-year, driven by higher modem sales and the RF360 Holdings joint venture. However, licensing revenue decreased by 27%, significantly impacted by ongoing disputes with Apple and its contract manufacturers, leading to a lack of royalty revenue from these key customers. Despite the net loss, the company's operational cash flow remained robust, providing $1.76 billion in net cash from operating activities. Qualcomm continued to invest in R&D, particularly for 5G technologies. The company also faces significant ongoing legal and regulatory challenges, including a €997 million fine from the European Commission. The proposed acquisition of NXP Semiconductors remains a key strategic focus, although it is subject to regulatory approvals. Investors should monitor the resolution of the licensing disputes, the progress of the NXP acquisition, and the impact of ongoing regulatory investigations.
Financial Highlights
48 data points| Revenue | $6.04B |
| Cost of Revenue | $2.66B |
| Gross Profit | $3.37B |
| R&D Expenses | $1.42B |
| SG&A Expenses | $773.00M |
| Operating Expenses | $6.04B |
| Operating Income | -$4.00M |
| Interest Expense | $170.00M |
| Net Income | -$5.98B |
| EPS (Basic) | $-4.05 |
| EPS (Diluted) | $-4.05 |
| Shares Outstanding (Basic) | 1.48B |
| Shares Outstanding (Diluted) | 1.48B |
Key Highlights
- 1Reported a net loss of $5.95 billion for the quarter, significantly down from a net income of $682 million in the prior year, primarily due to a $5.9 billion tax charge related to the U.S. Tax Cuts and Jobs Act.
- 2Equipment and services revenue increased by 14% to $4.70 billion, driven by higher modem sales for new product launches and the RF360 Holdings joint venture.
- 3Licensing revenue decreased by 27% to $1.36 billion, largely due to the absence of royalty revenue from Apple and another key licensee amidst ongoing disputes.
- 4Net cash provided by operating activities was strong at $1.76 billion, demonstrating resilient cash generation despite the reported net loss.
- 5The company incurred a significant charge of approximately $1.2 billion due to a European Commission fine related to competition law violations.
- 6The proposed acquisition of NXP Semiconductors remains on track, with funding secured through debt issuance and foreign cash, expected to close in early 2018.
- 7Continued investment in research and development, with R&D expenses increasing to $1.42 billion, reflecting ongoing commitment to 5G and other emerging technologies.