Summary
Qualcomm Inc. reported solid revenue growth in the third quarter of fiscal year 2018, with total revenues reaching $5.6 billion, a 4% increase year-over-year. This growth was driven by a strong performance in its semiconductor business (QCT), which saw an increase in equipment and services revenues, largely due to higher demand from Chinese OEMs and favorable RFFE product revenues from its RF360 Holdings joint venture. The licensing business (QTL) experienced a notable revenue increase, partially due to a $500 million interim payment from a key licensee amidst ongoing disputes. Despite the revenue growth, Qualcomm recorded a significant net loss of $4.371 billion for the nine months ended June 24, 2018, primarily driven by a substantial income tax charge of $5.73 billion related to the U.S. Tax Cuts and Jobs Act. The company's liquidity remains strong with $35.6 billion in cash and cash equivalents. However, the potential termination of the NXP acquisition is a significant overhang, with a $2 billion termination fee payable if regulatory approval is not obtained by July 25, 2018. The company continues to manage its cost structure through a $1 billion Cost Plan and is actively involved in numerous legal and regulatory proceedings, most notably the ongoing dispute with Apple.
Financial Highlights
50 data points| Revenue | $5.58B |
| Cost of Revenue | $2.49B |
| Gross Profit | $3.09B |
| R&D Expenses | $1.42B |
| SG&A Expenses | $655.00M |
| Operating Expenses | $4.67B |
| Operating Income | $903.00M |
| Interest Expense | $212.00M |
| Net Income | $1.20B |
| EPS (Basic) | $0.81 |
| EPS (Diluted) | $0.81 |
| Shares Outstanding (Basic) | 1.48B |
| Shares Outstanding (Diluted) | 1.49B |
Key Highlights
- 1Total revenues increased by 4% to $5.6 billion in the third quarter of fiscal 2018 compared to the prior year.
- 2QCT segment revenues grew due to increased demand from Chinese OEMs and strong RFFE product performance.
- 3QTL licensing revenues saw a boost from a $500 million interim payment from a key licensee amid ongoing disputes.
- 4A significant net loss of $4.371 billion was recorded for the nine months ended June 24, 2018, primarily due to a $5.73 billion tax charge related to the U.S. Tax Cuts and Jobs Act.
- 5The company's cash and cash equivalents stood at $35.6 billion as of June 24, 2018.
- 6The potential termination of the NXP acquisition is a key factor, with a $2 billion termination fee if regulatory approval is not secured by July 25, 2018.
- 7Ongoing legal and regulatory disputes, particularly with Apple, continue to impact licensing revenues and incur significant legal costs.