Qualcomm Falling As Q4 Beats But Q1 Guidance Is Light

However, the company issued a weak forecast for the first quarter.

Most notably, its shipments of chips for mobile phones saw further decline by 14pc on the same time past year to 203m units.

That effort was expected to get easier after Qualcomm earlier this year reached a long-awaited antitrust settlement in China that helped set terms the company can seek. Steve Mollenkopf, Qualcomm’s chief executive officer, said Wednesday that the review is “on track” and is expected to be completed by the end of 2015. We now forecast Qualcomm’s chipset market share to decline from 86% in 2014 to around 67% by the end of the Trefis forecast period.

Qualcomm is preparing to step up its efforts – including possible legal action – against a few of the Chinese holdouts and expects to get paid in full eventually, President Derek Aberle said. Qualcomm reported adjusted earnings of 91 cents per share or $1.4 billion and $5.5 billion in revenue for its fourth fiscal quarter.

For its fiscal Q4 ended September 27, Qualcomm reported an 18% dip in sales to $5.5 billion.

Qualcomm shares were trading at $56.74 after the bell. Management did say they expect $5.2 billion to $6 billion in revenues for the current quarter and non-GAAP earnings of 80 cents to 90 cents per share, both of which would mark declines from a year ago.

For now, licensing patents provides more than half of Qualcomm’s profits.

The company was hurt earlier this year by Samsung Electronics Co Ltd’s decision to use an internally developed processor, instead of the Snapdragon chips, in its Galaxy S6 smartphones. Though that Silicon Valley company designs its own processors, it frequently uses Qualcomm chips to manage cellular connections. QUALCOMM finished near the middle of a 3-week trading range.

Qualcomm said on Wednesday that demand for the new version of its flagship Snapdragon mobile chips was stronger than it had expected in the fourth quarter.

That left Qualcomm out of the top selling Andriod smartphone.

Investors are still waiting for Qualcomm management’s full response to its change in fortunes. Seeing the storm ahead, the company announced in July a major restructuring, laying off 15% of its workforce. The moves, including planned cost reductions of $1.4 billion, came under pressure from activist hedge fund Jana Partners.