Qualcomm shares fall 6pc on dour current-quarter forecast

Qualcomm Inc missed quarterly revenue estimates and forecast current-quarter revenue and profit below analysts' expectations on Wednesday, sending its shares down nearly 6% in extended trading.

The company also lowered its outlook for the number of smart devices with modem chips that would be sold in 2019 to 1.7 billion to 1.8 billion, down from a previous estimate of 1.8 billion to 1.9 billion.

Qualcomm collects license fees from smartphone makers for using its patents in their devices and more device sales often result in higher revenue and profits.

The San Diego-based company's modem chip shipments fell 22% to 156 million in the third quarter, missing analysts' estimate of 160.1 million, according to FactSet.

Apple Inc and Qualcomm settled all litigation in April. Apple signed a six-year patent license deal with Qualcomm, as well as a multi-year chip supply agreement.

The two have not said when Apple will resume using Qualcomm's chips in iPhones after dropping them in favor of Intel Corp's chips for 2018 iPhone models.

Apple's purchase of the majority of Intel modem business last week as part of efforts to supply its own smartphone chips could create uncertainty around how much of Apple's modem chip business Qualcomm can win in the coming years.

Qualcomm forecast total revenue of between $4.3 billion and $5.1 billion for its fourth quarter, and a profit of between 65 cents and 75 cents per share.

That missed analysts' average estimate of revenue of $5.63 billion and a profit of $1.08 per share, according to IBES data from Refinitiv.

Qualcomm is also working to pause a sweeping antitrust decision in a case brought by the US Federal Trade Commission. The company has said the ruling could upend its licensing talks with handset makers around 5G technology, and officials from the Pentagon and Justice Department recently weighed in Qualcomm's favor in the dispute.

Revenue, excluding an extraordinary gain, fell to $4.9 billion in the third quarter, missing analysts' estimates of $5.08 billion.

Qualcomm's revenue for the quarter excluded a roughly $4.6 billion payment from Apple for previously unpaid royalties while the two were in a legal dispute.

Including the payment, revenue was $9.64 billion.

Excluding items, the company earned 80 cents per share, beating analysts' average estimate of 75 cents.