Qualcomm jumps 15% after settling with Huawei and issuing strong earnings guidance

• Qualcomm on Wednesday reported fiscal third quarter earnings and announced that it had reached a settlement with Huawei that boosted its fourth-quarter outlook.
• Shares of the company jumped as much as 15% in intraday trading Thursday.
• Qualcomm expects that in its fiscal fourth quarter, its revenue will be between $5.5 billion and $6.3 billion, excluding other items. The average economist estimate for the quarter is revenue of $5.77 billion.
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Shares of Qualcomm surged as much as 15% to an all-time intraday high of $107.40 per share on Thursday after the company announced in its fiscal third quarter earnings release Wednesday that it had reached a settlement with Huawei and issuing a strong fourth quarter outlook.

Qualcomm expects that in its fiscal fourth quarter, its revenue will be between $5.5 billion and $6.3 billion, excluding other items. The average economist estimate for the quarter is revenue of $5.77 billion, according to Bloomberg data.

Revenues including backpay from the new Huawei deal will be between $7.3 billion and $8.1 billion, according to the company. Earnings per share will be $1.05 to $1.25, unadjusted.

"As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins," said Steve Mollenkopf, CEO of Qualcomm, in a statement.

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He continued: "We delivered earnings above the high end of our range, continued to execute in our product and licensing businesses and entered into a new long-term patent license agreement with Huawei, all of which position us well for the balance of 2020 and beyond."

In addition to Huawei, Qualcomm has a relationship with Apple and is again supplying chips to the company after a legal battle last year. The "delay of a global 5G flagship phone launch" could negatively impact fourth quarter performance, Qualcomm said.

In the third quarter, Qualcomm reported adjusted revenue of $4.89 billion and net income of $845 million, or 74 cents per share.

Qualcomm has gained roughly 21% year-to-date.