Qualcomm, whose chipsets are found in most smartphones and mobile devices, has reported its third quarter financial results, which revealed a 40 percent slump in quarterly profit. The company took a big hit from its ongoing legal dispute with Apple and four of Apple’s contractors, which accuse Qualcomm of overcharging for its chips and violating antitrust laws, and have stopped paying royalties.
Qualcomm CEO Steve Mollenkopf said in the earnings statement:
“We believe that we hold the high ground with regard to the dispute with Apple, and we have initiated new actions to protect the well-established value of our technologies.”
The company reported profits of $866 million, or 58 cents per share, for the third quarter that ended on June 25, a big decline compared to a net income of $1.44 billion, or 97 cents per share, during the same quarter last year. Revenue fell 11.1 percent to $5.4 billion.
Qualcomm’s profits were also affected by a $927 million fine the company had to pay to the Korea Free Trade Commission, and a $940 million payment it made to Blackberry after the two companies reached a settlement on a royalty dispute.
As for the current quarter, Qualcomm forecasts earnings per share between 55 and 65 cents, with revenue falling to between $5.4 billion and $6.2 billion, a six percent decrease at the midpoint, compared to the same period last year. The company’s stock slipped 3 percent following its earnings statement.