Qualcomm Inc. (QCOM) entered into an expanded deal with one of its biggest customers and beat revenue estimates in its latest quarter even as it swung to a deep loss.
In its fiscal first quarter, Qualcomm took a $6 billion charge related to the new US tax law and a $1.2 billion charge for a fine imposed by the European Commission, which claimed that payments made to Apple to entice it to exclusively use Qualcomm chips were anticompetitive. The chipmaker posted adjusted diluted earnings per share (EPS) of $0.98 and revenues of $6.1 billion. Wall Street was looking for earnings of 91 cents per share with $5.93 billion in revenue. As the legal battle escalated, reports emerged that Apple was designing its iPhone and iPads for 2018 without any Qualcomm components.
Qualcomm did not release QCT numbers for the recent quarter, but noted that in Q1 2017, the company received $740 million in QTL revenues related to Apple products.
Revenue at the QCT business rose 13 percent to US$4.65 billion.
"Qualcomm has enjoyed a strong partnership with Samsung for many years, and we are pleased to further strengthen and extend our relationship through this amended cross-license agreement, alongside our continuing relationship as a key product supplier to Samsung", said Steve Mollenkopf, Chief Executive Officer, Qualcomm Incorporated.
As part of the agreement, Samsung said it will withdrawl its intervention in Qualcomm's appeal of of what the Korean Fair Trade Commission called "excessive" licensing fees. Most recently, Broadcom has focused on wooing Qualcomm investors directly in the hopes of swaying opinions and opening communication to make the merger a reality.