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Qualcomm expects at least $4.5 billion from Apple settlement
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A Qualcomm logo seen displayed on a smart phone with Apple logo on the background.
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Qualcomm said on Wednesday that it expects to receive $4.5 billion to $4.7 billion from its royalty settlement with Apple,
The detail, disclosed in Qualcomm’s second-quarter earnings report, shows that Apple paid a high price to end a legal battle between the two tech giants that spanned multiple continents and threatened Apple’s ability to release a 5G iPhone.
Here’s the passage from Qualcomm’s earnings report:
“While we continue to assess the accounting impacts of the agreements, our financial guidance for the third quarter of fiscal 2019 includes estimated revenues of $4.5 billion to $4.7 billion resulting from the settlement (which will be excluded from our Non-GAAP results), consisting of a payment from Apple and the release of our obligations to pay or refund Apple and the contract manufacturers certain customer-related liabilities. “
Since the settlement on April 16, Qualcomm’s stock is up over 43%. Apple stock is up over 5% over that stretch, with almost all the gains coming on Wednesday following a better-than-expected earnings report. The companies settled as a federal trial between the two companies was getting underway in San Diego.
The agreement included a one-time payment from Apple to Qualcomm, a six-year licensing deal between the two companies, and an agreement from Apple to buy Qualcomm chips. The payment amounts to a small portion of Apple’s $225.4 billion pile of cash and marketable securities.
Shortly after the settlement, Qualcomm CEO Steve Mollenkopf declined to answer questions about the settlement’s size.
“Well, a deal like this, there’s a lot of value back and forth, and it’s just best to keep it confidential,” he said.
WATCH: Qualcomm beats expectations on top and bottom lines
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