Qualcomm in Settlement Talks With Broadcom, Postpones Q2 Financials
Qualcomm (NASDAQ: QCOM) said today it is in advanced IP settlement discussions with rival chipmaker Broadcom of Irvine, CA, and the San Diego wireless giant postponed the release of its second-quarter financial results that was scheduled today.
“Hopefully, this is a good thing,” says James Brehm, an information and communications technologies analyst with Frost & Sullivan near San Antonio, TX. “I think they want to put as much water under the bridge as possible on this one.”
Meanwhile, Broadcom (NASDAQ: BRCM) has been busy on several fronts. In addition to negotiating its IP case with Qualcomm, the Irvine company disclosed yesterday it’s making an unsolicited $764 million bid for Emulex Corp. (NYSE: [[ticker: ELX]]), a networking specialist in nearby Costa Mesa, CA. That news eclipsed the release of Broadcom’s first-quarter financial results as scheduled yesterday. The company posted a first-quarter loss of $91.9 million on sales of $853.4 million.
The two Southern California chipmakers have been locked in a wide-ranging patent dispute taking place in federal courtrooms in San Diego and Orange Counties, and the quasi-judicial International Trade Commission. Qualcomm says a global settlement of all its disputes with Broadcom—if an agreement can be reached—would have an impact on its financial results. The company rescheduled its second quarter earnings call to Monday.
Excluding the potential financial impact of a settlement with Broadcom, Qualcomm says in its statement that the company’s second-quarter revenue and operating income met or exceeded prior guidance. Qualcomm added that it remains in its quiet period and that its investor relations representatives will not be available until after Monday’s conference call.