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Qualcomm plan to kill NXP deal, earnings beat send stock popping higher
Qualcomm Inc. shares received a jolt Wednesday afternoon after the chip maker beat quarterly earnings expectations, confirmed that it plans to end a long-planned acquisition of NXP Semiconductors NV and buy back up to $30 billion in stock. NXP shares gained more than 5% in immediate after-hours trading after gaining 1% in regular trading, when reports suggested the company would dump the NXP deal and instead buy back shares. “We intend to terminate our purchase agreement to acquire
NXP when the agreement expires at the end of the day today, pending any new material developments,” Chief Executive Steve Mollenkopf said in Wednesday’s announcement. “In addition, as previously indicated, upon termination of the agreement, we intend to pursue a stock repurchase program of up to $30 billion to deliver significant value to our stockholders.” Qualcomm reported third-quarter net income of $1.2 billion, or 82 cents a share, on sales of $5.6 billion, up from $5.37 billion a year ago. After adjusting for stock-based compensation and other effects, the company claimed earnings of $1.01 a share, up from 83 cents a share a year ago. Analysts on average expected Qualcomm to report adjusted profit of 71 cents a share on sales of $5.19 billion, according to FactSet, after the chip maker predicted adjusted earnings of 65 cents to 75 cents a share on revenue of $4.8 billion to $5.6 billion. Qualcomm predicted fourth-quarter adjusted earnings of 75 cents to 85 cents a share on sales of $5.1 billion to $5.9 billion. For the company’s fourth quarter, analysts on average were predicting adjusted profit of 77 cents a share on sales of $5.47 billion, according to FactSet. Qualcomm stock has fallen 7.2% so far this year, as the S&P 500 index has gained 5.5%.