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Jun 28, 2020
Qualcomm Q3 2020 Earnings Report
Qualcomm's earnings exceeded the high end of guidance, resolved a dispute with Huawei, and signed a new license agreement.
Key Takeaways
Qualcomm announced its Q3 fiscal year 2020 results, which showed revenues of $4.9 billion and GAAP EPS of $0.74. The company resolved its dispute with Huawei and signed a new long-term patent license agreement.
Earnings exceeded the high end of the guidance range.
Dispute with Huawei was resolved, and a new license agreement was signed.
5G rollout benefits are being realized.
The company is well-positioned for the balance of 2020 and beyond.
Qualcomm
Qualcomm
Qualcomm Revenue by Segment
Revenue by Segment
QTL Revenue
CapyFin.comHandsets Revenue
CapyFin.com Forward Guidance
Qualcomm's financial guidance for the fourth quarter of fiscal 2020 includes estimated QTL revenues for royalties due on sales made by Huawei and estimated revenues of approximately $1.8 billion related to amounts due from Huawei under the settlement agreement and the new global patent license agreement.
Positive Outlook
- Estimated QTL revenues for royalties due on sales made by Huawei in the September 2020 quarter.
- Estimated revenues of approximately $1.8 billion related to amounts due from Huawei under the settlement agreement
- Amounts due for the March 2020 and June 2020 quarters under the new global patent license agreement
- Q4 FY20 Non-GAAP Revenues $5.5B - $6.3B
- Q4 FY20 Non-GAAP diluted EPS $1.05 - $1.25
Challenges Ahead
- Guidance includes an impact of greater than ($0.25) to EPS attributable to a planning assumption of an approximate 15% year-over-year reduction in handset shipments due to COVID-19
- Partial impact from the delay of a global 5G flagship phone launch.
- Challenging economic environment and highly uncertain effects of COVID-19.
- Q4 FY20 GAAP Revenues $7.3B - $8.1B Less revenues attributable to other items ~$1.8B
- Q4 FY20 GAAP diluted EPS $2.12 - $2.32 Less diluted EPS attributable to other items $1.31
Revenue & Expenses
Visualization of income flow from segment revenue to net income