After a quarter of declines, Qualcomm promises growth

Qualcomm posted slowing profits and revenues in its fiscal fourth quarter, and its outlook fell short of some analysts expectations. However, the company's stock rose slightly following the report, possibly reflecting investor relief over the chipmaker's expectations of growth in the coming year and the announcement of a new licensing deal with Samsung.

The chipmaker reported revenues in the quarter of $2.69 billion, down 19 percent year-over-year and 2 percent sequentially. The company's net income clocked in at $803 million, down 9 percent year-over-year and up 9 percent sequentially.

Interestingly, Qualcomm's figures were buffeted but a number of high-profile expenses and transactions:

• The company recorded a $230 million charge in the quarter related to an "estimated fine expected to be levied by the Korea Fair Trade Commission."
• The company's 2009 results included a $783 million charge due to Qualcomm's settlement with rival Broadcom.
• The company's expenses were offset by $560 million in revenues in the quarter from Nokia, which Qualcomm inked a settlement with earlier this year.

But perhaps the most notable element in Qualcomm's earnings announcement was the disclosure of a new agreement with Samsung: "I am also pleased to announce that we recently extended our license agreement with Samsung, covering both 3G and 4G," said  CEO Paul Jacobs.

In a conference call with analysts Qualcomm executives provided details on the Samsung transaction. Qualcomm's Derek Aberle said the deal includes a 15-year license and payments from Samsung totaling $1.3 billion. The agreement covers CDMA2000, WCDMA, TD-SCDMA and OFDMA-based standards including LTEs and WiMAX, he said.

While Qualcomm's financial metrics for the quarter showed mostly declines on a sequential and year-over-year basis, the company's outlook for the fiscal first quarter of 2010--and the fiscal year 2010--showed expectations of growth. Qualcomm said it expects to grow revenues in the coming quarter by between 1 and 9 percent. The company expects similar growth figures for the fiscal year 2010.

According to Reuters, those forecasts fell below Wall Street expectations. Nonetheless, Qualcomm's stock enjoyed a bounce following the earnings news--notable in that the company's share price has declined from around $47 to around $41 during the past few months. Qualcomm's stock was up slightly in after-hours trading following its earnings announcement, to around $42.01 per share.

For more:
- see FierceWireless' Q3 earnings page [1]
- see this release
[2]- see this conference call transcript [3]
- see this MarketWatch article [4]
- see this Reuters article [5]

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Qualcomm roughed up by lower profits, $208M Korean antitrust fine [6]
Qualcomm to pay Broadcom $891M in massive settlement [7]
Antitrust regulators question Qualcomm chip sales in South Korea [8]
Qualcomm gains Android buzz ahead of earnings [9]