AAPL Apple Inc

By Asa Fitch 

Qualcomm Inc. said it would receive at least $4.5 billion from Apple Inc. as part of a legal settlement between the companies that ended more than two years of wrangling over the chip maker's patent-licensing fees.

The payment range of between $4.5 billion and $4.7 billion was disclosed Wednesday in Qualcomm's fiscal second-quarter earnings results.

In the latest period, the company reported $4.88 billion in adjusted revenue, compared with the $4.8 billion analysts surveyed by FactSet had expected.

Net income was $663 million, or 55 cents a share. Qualcomm said adjusted profit came to 77 cents a share, compared with analysts' projected 71 cents.

This quarter, the company's third fiscal quarter, Qualcomm expects revenue, which will include the payment from Apple, to reach $9.2 billion to $10.2 billion.

The one-time payment is also expected to drive up Qualcomm's profit for the quarter to a range of $3.57 to $3.77 a share. On an adjusted basis, which would exclude the Apple payment, Qualcomm expects profit to fall to a range of 70 cents to 80 cents a share, below analysts' projected $1.29 a share.

Shares fell more than 4% in after-hours trading.

The payment was one of three prongs of a settlement last month that included a new six-year license agreement and a multiyear deal for Qualcomm to supply Apple with modem chips -- tiny wafers of silicon that handle communications with cell towers.

The deal opens the door for Apple to add next-generation cellular technology to future phones. Most analysts don't expect Apple to introduce a 5G phone until 2020.

Maria Armental contributed to this article.

Write to Asa Fitch at asa.fitch@wsj.com

(END) Dow Jones Newswires

May 01, 2019 17:00 ET (21:00 GMT)

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