Qualcomm stock surges on Apple legal settlement - CNBC

Apple and Qualcomm have settled their royalty dispute, the companies announced in a press release.

The settlement includes a payment from Apple to Qualcomm as well as a chipset supply agreement, suggesting that Apple will buy Qualcomm chips for future iPhones. The companies did not say how much the payment will be.

Qualcomm stock rose more than 20% after the news broke, boosting its market cap by about $14.5 billion to to more than $84 billion. It's Qualcomm's best day since 1999.

Apple was up less than 1%. Intel, a Qualcomm competitor, sharply dipped on the news before recovering.

Qualcomm expects incremental earnings per share of $2 as product shipments ramp, the company said.

"This was a major win for Qualcomm as fears of a loss in the courts was a major overhang on the name with Apple going after this IP issue full steam ahead," Wedbush Securities analyst Dan Ives said. "A settlement is a surprise to investors as ultimately Apple realized this was more about two kids fighting in the sandbox and they have bigger issues ahead with 5G and iPhone softness rather than battling Qualcomm in court."

The two companies started proceedings in a trial in federal court in San Diego on Monday, which was expected to last until May. Both sides were asking for billions in damages. The antitrust case was originally filed by Apple in early 2017.

The complicated legal battle, centered around modem chips and related disputes, has been raging in courts around the world for the past two years, including an earlier trial between Qualcomm and the U.S. Federal Trade Commission.

For years, Apple bought modem chips from Qualcomm, but it chafed under Qualcomm's prices and requirement that any company using its chips would also pay licensing fees for its patents.

Apple argued that Qualcomm was abusing its position as one of the only suppliers for cellular technology, and Qualcomm contended that Apple was withholding payments that the two companies had hammered out as part of a royalty agreement.

According to Qualcomm, the new license between the two companies is six years, with a two-year option to extend. It includes a one-time payment from Apple to Qualcomm. The amount of the payment was not disclosed.

In November, Qualcomm CEO Steve Mollenkopf said that he believed that the two companies were on the "doorstep" to settling. Apple CEO Tim Cook contradicted him shortly after, saying that Apple hasn't been in settlement discussions since the third calendar quarter of 2018.

New iPhone models released in 2018 used Intel modem chips instead of Qualcomm's technology.

Analysts had previously said that the dispute between Qualcomm and Apple could slow down Apple's plans to support next-generation 5G networks. Qualcomm is one of the top suppliers of chips that can connect to 5G networks. The agreement opens up the possibility that Apple could release a 5G iPhone sooner than expected with Qualcomm's modem technology.

Here is the full press release:

Qualcomm and Apple® today announced an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm. The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement.

WATCH: How Qualcomm became a chip giant and why its business model is being challenged by Apple and the FTC

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https://www.cnbc.com/2019/04/16/apple-qualcomm-settle-royalty-dispute-sources-say.html

2019-04-16 20:04:11Z
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Qualcomm stock surges on Apple legal settlement - CNBC

Apple and Qualcomm have settled their royalty dispute, the companies announced in a press release.

The settlement includes a payment from Apple to Qualcomm as well as a chipset supply agreement, suggesting that Apple will buy Qualcomm chips for future iPhones. The companies did not say how much the payment will be.

Qualcomm stock rose more than 20% after the news broke, boosting its market cap by about $14.5 billion to to more than $84 billion. It's Qualcomm's best day since 1999.

Apple was up less than 1%. Intel, a Qualcomm competitor, sharply dipped on the news before recovering.

Qualcomm expects incremental earnings per share of $2 as product shipments ramp, the company said.

"This was a major win for Qualcomm as fears of a loss in the courts was a major overhang on the name with Apple going after this IP issue full steam ahead," Wedbush Securities analyst Dan Ives said. "A settlement is a surprise to investors as ultimately Apple realized this was more about two kids fighting in the sandbox and they have bigger issues ahead with 5G and iPhone softness rather than battling Qualcomm in court."

The two companies started proceedings in a trial in federal court in San Diego on Monday, which was expected to last until May. Both sides were asking for billions in damages. The antitrust case was originally filed by Apple in early 2017.

The complicated legal battle, centered around modem chips and related disputes, has been raging in courts around the world for the past two years, including an earlier trial between Qualcomm and the U.S. Federal Trade Commission.

For years, Apple bought modem chips from Qualcomm, but it chafed under Qualcomm's prices and requirement that any company using its chips would also pay licensing fees for its patents.

Apple argued that Qualcomm was abusing its position as one of the only suppliers for cellular technology, and Qualcomm contended that Apple was withholding payments that the two companies had hammered out as part of a royalty agreement.

According to Qualcomm, the new license between the two companies is six years, with a two-year option to extend. It includes a one-time payment from Apple to Qualcomm. The amount of the payment was not disclosed.

In November, Qualcomm CEO Steve Mollenkopf said that he believed that the two companies were on the "doorstep" to settling. Apple CEO Tim Cook contradicted him shortly after, saying that Apple hasn't been in settlement discussions since the third calendar quarter of 2018.

New iPhone models released in 2018 used Intel modem chips instead of Qualcomm's technology.

Analysts had previously said that the dispute between Qualcomm and Apple could slow down Apple's plans to support next-generation 5G networks. Qualcomm is one of the top suppliers of chips that can connect to 5G networks. The agreement opens up the possibility that Apple could release a 5G iPhone sooner than expected with Qualcomm's modem technology.

Here is the full press release:

Qualcomm and Apple® today announced an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm. The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement.

WATCH: How Qualcomm became a chip giant and why its business model is being challenged by Apple and the FTC

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https://www.cnbc.com/2019/04/16/apple-qualcomm-settle-royalty-dispute-sources-say.html

2019-04-16 19:58:15Z
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Qualcomm and Apple agree to drop all litigation - Apple Newsroom

Qualcomm invents breakthrough technologies that transform how the world connects, computes and communicates. When we connected the phone to the Internet, the mobile revolution was born. Today, our inventions are the foundation for life-changing products, experiences, and industries. As we lead the world to 5G, we envision this next big change in cellular technology spurring a new era of intelligent, connected devices and enabling new opportunities in connected cars, remote delivery of health care services, and the IoT — including smart cities, smart homes, and wearables. Qualcomm Incorporated includes our licensing business, QTL, and the vast majority of our patent portfolio. Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated, operates, along with its subsidiaries, all of our engineering, research and development functions, and all of our products and services businesses, including, the QCT semiconductor business. For more information, visit Qualcomm’s website, OnQ blog, Twitter and Facebook pages.

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2019-04-16 19:08:30Z
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Stocks rise after strong earnings results - Yahoo Finance

Stocks rose Tuesday as a host of major companies reported quarterly results that beat Wall Street’s expectations.

The S&P 500 (^GSPC) gained 0.1%, or 2.85 points, as of 2:37 p.m. ET, led by advances in the Materials and Financials sectors.

The Dow (^DJI) rose 0.29%, or 77.14 points, as shares of component company Johnson & Johnson (JNJ) advanced following an upbeat quarterly report. Declines in shares of UnitedHealth Group, which had risen during early trading, capped gains in the index, however. The Nasdaq (^IXIC) advanced 0.39%, or 30.71 points.

Positive earnings results delivered Tuesday morning from major financial firms, including Bank of America (BAC) and BlackRock (BLK), helped fuel investor optimism at the start of another earnings season, offsetting some concerns after Goldman Sachs (GS) and Citigroup (C) earlier in the week posted disappointing results.

Investors are broadly expecting corporate profits to come in light over last year and are monitoring earnings results to gauge the extent of the slowdown. Earnings are expected to fall 4.9%, and aggregate S&P 500 earnings per share growth is expected to decline by 2.7% year-over-year for the first quarter 2019 earnings season, Jonathan Golub, Credit Suisse chief U.S. equity strategist, wrote in a note. However, Financials are one of four sectors analysts expect to deliver positive EPS growth, along with Industrials, Health Care and REITS, he added.

Companies including Netflix (NFLX), IBM (IBM) and United Continental (UAL) are set to report results after-the-bell on Tuesday.

Bond yields, which move inversely to prices, stabilized after several Federal Reserve officials delivered positive assessments of the domestic economy and suggested benchmark interest rates could remain on hold through part of next year.

Chicago Fed President Charles Evans told CNBC Monday he “could see” the benchmark Fed funds rate “flat and unchanged” into fall 2020 in order to help support the outlook for inflation, which has recently run persistently below the Fed’s 2% target.

Evans said he sees economic growth decelerating to around 2% this year, from 3.1% last year, but added that the U.S. labor market remains strong and that he is not worried about a recession.

Boston Fed Chairman Eric Rosengren, another voting member of this year’s Federal Open Market Committee, also pointed to lower-than-targeted inflation in a speech delivered Monday in North Carolina. However, Rosengren noted that the miss to the inflation target is “relatively modest,” and said that “in many respects the economy is doing quite well” in relation to the Fed’s dual mandate for stable prices and maximum sustainable employment.

Bond yields edged up across the curve, with the yield on the 10-year Treasury note rising 3.7 basis points to 2.59%, as of Tuesday afternoon.

STOCKS

Bank of America (BAC, +0.08%) reported quarterly earnings results that beat Wall Street’s expectations, buoyed by strong consumer loans and deposits activity. The company delivered record quarterly profit of $7.3 billion, or 70 cents per share, beating expectations for 66 cents per share. Revenue of $23.1 billion was in-line with expectations. The company’s consumer lending business – its largest segment – delivered a 25% increase in profit over last year to $3.2 billion. However, shares fell around market open as CFO Paul Donofrio said during a call with investors that net interest income is expected to decline over the rest of the year to about half of last year’s 6% growth.

New York, USA - April 7, 2018: Street view on Bank of America branch in NYC with people waiting, pedestrians crossing, crosswalk, bike, road in Manhattan

BlackRock (BLK, +2.96%) exceeded consensus expectations for quarterly profits as its assets under management grew sequentially. Earnings per share of $6.61 beat expectations for $6.13, while $3.34 billion in revenue was in-line with consensus estimates. Blackrock’s first quarter saw $65 billion in total net inflows across product types, higher than the $54.63 billion the firm brought in the year prior.

Johnson & Johnson (JNJ, +2.04%) beat consensus expectations for first-quarter earnings, after the company posted weak full-year guidance earlier this year amid ongoing lawsuits over allegations that its talc baby powder contained asbestos. First quarter adjusted earnings were $2.10 per share, higher than the $2.04 per share expected, while sales of $20.02 billion beat expectations for $19.61 billion. J&J now sees adjusted EPS in the range of $8.53 to $8.63, from between $8.50 and $8.65 previously, and full-year sales of between $80.4 billion to $81.2 billion.

UnitedHealth Group (UNH, -5.19%) exceeded Wall Street’s expectations on the top and bottom lines for the first quarter and raised its full-year forecast for 2019 as the largest insurer in the country grew its customer base. The company sees full-year adjusted earnings per share between $14.50 to $14.75, from $14.40 to $14.70 previously. First-quarter adjusted earnings of $3.73 per share beat consensus estimates by 13 cents, while first-quarter revenue of $60.3 billion was higher than the $59.76 billion expected. In the first quarter, the company added 880,000 new customers.

ECONOMY

Industrial production unexpected declined by a seasonally adjusted 0.1% in March, the Federal Reserve reported Tuesday. Consensus economists expected this measure of factory, mining and utilities output to rise 0.2% for the month. March’s results brought the index to a 0.3% decline for the first quarter of 2019. Last year, industrial production rose 2.8% in March.

Manufacturing output, which comprises the largest portion of industrial production, remained flat in March, following an upwardly revised 0.3% decline in February. Consensus economists were expecting a rebound to a 0.1% increase in manufacturing production in March.

Morning Brief

—

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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Tech companies like Lyft want your money – not ‘your opinion’

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Recession risks remain muted as fear tracks higher: Report

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2019-04-16 18:39:00Z
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J&J's new ketamine-like depression drug Spravato off to 'very, very strong start,' company says - CNBC

Up to 800 health centers have been approved to administer Johnson & Johnson's new ketamine-like depression drug, which was cleared for sale last month, and patients are already using it, the company said Tuesday.

Spravato, or esketamine, won federal approval March 5 for treatment-resistant depression. It's similar to ketamine, a sedative known as the club drug "Special K" that's increasingly being studied and used to treat depression.

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Spravato's side effects include sedation and dissociation. It also carries the potential risk of misuse and abuse. Acknowledging these factors, the FDA stipulated Spravato must be administered in a medically supervised health-care setting where patients are monitored. Pharmacies, doctor's offices and clinics also need to be certified.

In a little more than a month, J&J has certified up to 800 sites, putting the company "well on track" with its plans for the year, Jennifer Taubert, executive vice president of pharmaceuticals, told analysts on a call Tuesday discussing first-quarter earnings results. She said a number of patients have received their first dose, with some receiving multiple doses.

"So we believe that we're off to a very, very strong start with Spravato, and that it is going to be an important growth driver for us," she said.

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2019-04-16 15:34:11Z
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Stocks rise after strong earnings results - Yahoo Finance

Stocks rose Tuesday as a host of major companies reported quarterly results that beat Wall Street’s expectations.

The S&P 500 (^GSPC) gained 0.17%, or 4.9 points, as of 11:15 a.m. ET, led by advances in the Financials and Tech sectors.

The Dow (^DJI) rose 0.17%, or 44.68 points, as shares of component company Johnson & Johnson (JNJ) advanced following an upbeat quarterly report. Declines in shares of UnitedHealth Group, which had risen during early trading, capped gains in the index, however. The Nasdaq (^IXIC) advanced 0.4%, or 31.6 points.

Positive earnings results delivered Tuesday morning from major financial firms, including Bank of America (BAC) and BlackRock (BLK), helped fuel investor optimism at the start of another earnings season, offsetting some concerns after Goldman Sachs (GS) and Citigroup (C) earlier in the week posted disappointing results.

Investors are broadly expecting corporate profits to come in light over last year and are monitoring earnings results to gauge the extent of the slowdown. Earnings are expected to fall 4.9%, and aggregate S&P 500 earnings per share growth is expected to decline by 2.7% year-over-year for the first quarter 2019 earnings season, Jonathan Golub, Credit Suisse chief U.S. equity strategist, wrote in a note. However, Financials are one of four sectors analysts expect to deliver positive EPS growth, along with Industrials, Health Care and REITS, he added.

Companies including Netflix (NFLX), IBM (IBM) and United Continental (UAL) are set to report results after-the-bell on Tuesday.

Bond yields, which move inversely to prices, stabilized after several Federal Reserve officials delivered positive assessments of the domestic economy and suggested benchmark interest rates could remain on hold through part of next year.

Chicago Fed President Charles Evans told CNBC Monday he “could see” the benchmark Fed funds rate “flat and unchanged” into fall 2020 in order to help support the outlook for inflation, which has recently run persistently below the Fed’s 2% target.

Evans said he sees economic growth decelerating to around 2% this year, from 3.1% last year, but added that the U.S. labor market remains strong and that he is not worried about a recession.

Boston Fed Chairman Eric Rosengren, another voting member of this year’s Federal Open Market Committee, also pointed to lower-than-targeted inflation in a speech delivered Monday in North Carolina. However, Rosengren noted that the miss to the inflation target is “relatively modest,” and said that “in many respects the economy is doing quite well” in relation to the Fed’s dual mandate for stable prices and maximum sustainable employment.

Bond yields edged up across the curve, with the yield on the 10-year Treasury note rising 3.2 basis points to 2.585%, as of Tuesday morning.

STOCKS

Bank of America (BAC, -2.26%) reported quarterly earnings results that beat Wall Street’s expectations, buoyed by strong consumer loans and deposits activity. The company delivered record quarterly profit of $7.3 billion, or 70 cents per share, beating expectations for 66 cents per share. Revenue of $23.1 billion was in-line with expectations. The company’s consumer lending business – its largest segment – delivered a 25% increase in profit over last year to $3.2 billion. However, shares fell around market open as CFO Paul Donofrio said during a call with investors that net interest income is expected to decline over the rest of the year to about half of last year’s 6% growth.

New York, USA - April 7, 2018: Street view on Bank of America branch in NYC with people waiting, pedestrians crossing, crosswalk, bike, road in Manhattan

BlackRock (BLK, +2.71%) exceeded consensus expectations for quarterly profits as its assets under management grew sequentially. Earnings per share of $6.61 beat expectations for $6.13, while $3.34 billion in revenue was in-line with consensus estimates. Blackrock’s first quarter saw $65 billion in total net inflows across product types, higher than the $54.63 billion the firm brought in the year prior.

Johnson & Johnson (JNJ, +2.06%) beat consensus expectations for first-quarter earnings, after the company posted weak full-year guidance earlier this year amid ongoing lawsuits over allegations that its talc baby powder contained asbestos. First quarter adjusted earnings were $2.10 per share, higher than the $2.04 per share expected, while sales of $20.02 billion beat expectations for $19.61 billion. J&J now sees adjusted EPS in the range of $8.53 to $8.63, from between $8.50 and $8.65 previously, and full-year sales of between $80.4 billion to $81.2 billion.

UnitedHealth Group (UNH, -4.49%) exceeded Wall Street’s expectations on the top and bottom lines for the first quarter and raised its full-year forecast for 2019 as the largest insurer in the country grew its customer base. The company sees full-year adjusted earnings per share between $14.50 to $14.75, from $14.40 to $14.70 previously. First-quarter adjusted earnings of $3.73 per share beat consensus estimates by 13 cents, while first-quarter revenue of $60.3 billion was higher than the $59.76 billion expected. In the first quarter, the company added 880,000 new customers.

ECONOMY

Industrial production unexpected declined by a seasonally adjusted 0.1% in March, the Federal Reserve reported Tuesday. Consensus economists expected this measure of factory, mining and utilities output to rise 0.2% for the month. March’s results brought the index to a 0.3% decline for the first quarter of 2019. Last year, industrial production rose 2.8% in March.

Manufacturing output, which comprises the largest portion of industrial production, remained flat in March, following an upwardly revised 0.3% decline in February. Consensus economists were expecting a rebound to a 0.1% increase in manufacturing production in March.

Morning Brief

—

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.

Read more from Emily:

Tech companies like Lyft want your money – not ‘your opinion’

Levi Strauss shares jump more than 30% above IPO price at open

Facebook sued by Trump administration for alleged ‘discriminatory’ ad practices

Boeing 737 Max groundings ‘pressure’ U.S. economic data: Wells Fargo

Recession risks remain muted as fear tracks higher: Report

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2019-04-16 15:18:00Z
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Dow rises 100 points after strong earnings - CNBC

Stocks traded higher on Tuesday as investors cheered strong earnings from companies like UnitedHealth Group and Johnson & Johnson.

The Dow Jones Industrial Average rose 113 points, while the S&P 500 climbed 0.3% as the health-care sector outperformed. The Nasdaq Composite advanced 0.4%.

"This is definitely based upon earnings beats," said Jeff Kilburg, CEO of KKM Financial. "We're seeing some serious earnings being reported. That's relieved the market because there was some anxiety heading into the season."

Tuesday's move pushed the S&P 500 closer to 2,940, a record high set in late September.

"The catalyst we needed to test that 2,940 all-time high was earning," Kilburg said. "If we continue to see earnings beat expectations, we're going to see new all-time high put in."

UnitedHealth Group reported better-than-expected earnings and revenue. The company also raised its earnings guidance for the full year. Shares of UnitedHealth rose about 3% before trading about 0.5% higher.

Johnson & Johnson, another Dow component, climbed 2.9% on stronger-than-forecast quarterly results. More than half of its revenue came from prescription drug sales, which increased by more than 4%.

Other companies that posted better-than-expected quarterly earnings include Bank of America and BlackRock. IBM, Netflix, and CSX are among the companies set to report after Tuesday's close.

Equities also got a boost from dovish remarks made by Federal Reserve officials. Boston Fed President Eric Rosengren said the central bank does not need to adjust monetary policy at the moment, noting: "We have to continue to watch what's happening with financial stability issues."

Rosengren's remarks follow Chicago Fed President Charles Evans telling CNBC that rates can stay unchanged until the fall of 2020. "For me, that's to help support the inflation outlook and make sure it's sustainable," he said.

The S&P 500 is up more than 15% this year in large part because the Fed indicated it may not raise rates at all in 2019, a stark contrast to the four hikes from last year.

With the Fed and other central banks being "more dovish than ever," BlackRock CEO Larry Fink thinks stocks could experience a "melt-up."

"Despite where the markets are in equities, we have not seen money being put to work," Fink told CNBC's "Squawk Box" on Tuesday. "We have record amounts of money in cash. We still see outflows in retail in equities and in institutions."

—CNBC's Silvia Amaro contributed to this report.

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2019-04-16 13:45:07Z
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