Qualcomm (NASDAQ: QCOM) 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.
In Q2, revenues came in at $5 billion, down from the $5.2 billion in the prior-year quarter, while net income topped $0.9 billion, an improvement of 101% from the $0.4-billion figure in the prior-year quarter.
"We delivered a better than expected quarter with earnings per share above the high end of our estimates, reflecting stronger QTL results and solid execution in QCT," said CEO Steve Mollenkopf.
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.
Shares popped $2.31, or 2.7%, to $88.68 early Thursday morning.
