Qualcomm Reports 4Q Loss - InformationWeek

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Qualcomm Reports 4Q Loss

The chipmaker was upbeat, however, on news of its $1.3 billion patent deal with Samsung.

Qualcomm's fourth-quarter financial results showed a drop in profits and revenue, but the company reported a $1.3 billion patent deal with Samsung that investment banking analysts said pushed Qualcomm stock up slightly.

Profits dropped to $803 million from $878 million in last year's fourth quarter while revenue dropped to $2.7 billion from $3.3 billion.

The chip supplier has been moving into emerging wireless areas, including mobile TV and a partnership with Microsoft on handsets. However, major financial benefits of those efforts aren't likely to be felt for at least a few quarters.

In the meantime, Qualcomm said it continued to benefit from its Korean connection, its largest profit center, as it nailed down a new contract with Samsung and continued partnerships with LG. The Samsung deal calls for payments of $1.3 billion for use of Qualcomm patents for CDMA, WCDMa, OFDMA, TD-SCDMA, LTE, and WiMax.

The Samsung agreement more than covered a $230 million charge that Qualcomm said it expects to be levied against it for regulatory violations by the Korea Fair Trade Commission.

Qualcomm reported that its results were impacted by a $748 million settlement charge in connection with litigation with Broadcom. Revenue in the quarter included $560 million in an agreement with Nokia.

Paul E. Jacobs, chairman and CEO of Qualcomm, presented an upbeat tone in his remarks. "We continue to forecast growth for 3G CDMA in 2009, despite industry forecasts of a decline in the total handset market," Jacobs said in a statement. "Our broad chipset portfolio continues to expand, including additional low-cost single-chip solutions to further enable the 3G migration as well as increased investments in software and application processors."

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