Qualcomm signs patent licensing deal with Huawei
Qualcomm stock jumps in after-hours trading
Qualcomm Incorporated reached a deal with Chinese telecom business Huawei to settle a patent dispute, the company announced Wednesday.
The global licensing agreement grants Huawei back rights to some of the San Diego-based tech company’s patents effective Jan. 1, 2020, according to Qualcomm.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| QCOM | QUALCOMM INC. | 160.42 | -2.99 | -1.83% |
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Qualcomm expects about $1.8 billion from Huawei as part of the back-dated agreement.
“As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins,” Qualcomm CEO Steve Mollenkopf said in a statement.
Qualcomm announced the deal in its third-quarter earnings report. The company had $4.89 billion in revenue and $845 million in profit for its quarter that ended Tuesday.
One of many Qualcomm buildings is shown in San Diego. (REUTERS/Mike Blake/File Photo)
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The company reported a profit of $0.74 per share, beating analysts’ expectations. For its current quarter, Qualcomm predicted earnings between $1.05 and $1.25 per share, even with a 15 percent year-over-year drop in handset shipments it attributed to the coronavirus pandemic.
Qualcomm announced a similar licensing deal with Apple last year.
“We delivered earnings above the high end of our range, continued to execute in our product and licensing businesses and entered into a new long-term patent license agreement with Huawei, all of which position us well for the balance of 2020 and beyond,” Mollenkopf said.
Qualcomm’s share price jumped about 14 percent in after-hours trading Wednesday on the news.